6-K - WFG - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OFFOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2023

Commission File No. 001-39974

WEST FRASER TIMBER CO. LTD.

(Translation of registrant’s name into English)

885 WestGeorgia Street, Suite 1500

Vancouver, British Columbia

Canada V6C 3E8

(Addressof principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Form 20-F****☐ Form 40-F****☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) ☐

SUBMITTED HEREWITH

Exhibits
99.1	Notice of Annual General and Special Meeting to be held on April 18, 2023
99.2	Management Information Circular dated March 9, 2023
99.3	Form of Proxy
99.4	Financial Statements Request Form (NI 51-102 Mailing List Card)
99.5	Annual Report

-2-

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 17, 2023

WEST FRASER TIMBER CO. LTD.
/s/ Christopher A. Virostek
Christopher A. Virostek
Senior Vice-President, Finance and Chief Financial Officer

EX-99.1

Exhibit 99.1

NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS

We will hold the Meeting in Quesnel, B.C. Additionally, a live-webcast option will be provided for Shareholders to listen in and view the Meeting and askquestions.

The annual general and special meeting (the “Meeting”) of shareholders (“Shareholders”) **** of West Fraser Timber Co. Ltd. (the “Company”) will be held on April 18, 2023 at 11:30 a.m. (Vancouver time). The Meeting will be held at 1250 Brownmiller Road, Quesnel, B.C. Additionally, through our online meeting platform Registered Shareholders (as defined in the accompanying Circular) and duly appointed proxyholders will have a live-webcast option at https://web.lumiagm.com/433290564, password “westfraser2023” (case sensitive), where they can listen in and view the Meeting and ask questions. The Meeting will be held, for the following purposes:

1.	to receive the consolidated financial statements of the Company for the financial years ended<br>December 31, 2022 and 2021, together with the Auditor’s report on them;
2.	to fix the number of Directors at eleven;
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3.	to elect the Directors to hold office until the close of the next annual meeting of Shareholders;<br>
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4.	to appoint an auditor of the Company to serve until the close of the next annual meeting of Shareholders and<br>to authorize the Directors to fix the auditor’s remuneration;
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5.	to consider an advisory (non-binding) resolution on the<br>Company’s approach to executive compensation, as more particularly set out in the section of the accompanying Circular entitled “Advisory Resolution on the Company’s Approach to Executive Compensation (Say on Pay)”; and<br>
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6.	to consider and, if deemed appropriate, pass, with or without variation, an ordinary resolution confirming<br>and approving the amendment, restatement and continuation of the Shareholder Rights Plan (see “Business to be Transacted at the Meeting — Reconfirmation of Shareholder Rights Plan” in the accompanying Circular).
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No other matters are contemplated for consideration at the Meeting, however any permitted amendment to or variation of any matter identified in this Notice of Annual General and Special Meeting of Shareholders (the “Notice”) may properly be considered at the Meeting. The Meeting may also consider the transaction of such other business as may properly come before the Meeting or any adjournment thereof.

A copy of the annual report of the Company for the financial year ended December 31, 2022 (the “Annual Report”) will accompany this Notice for those Shareholders that had requested a copy of the Annual Report. The Annual Report may also be found on our website (www.westfraser.com) and under the Company’s profiles on SEDAR (System for Electronic Document Analysis and Retrieval) at www.sedar.com and on EDGAR (Electronic Data Gathering, Analysis, and Retrieval system) at www.sec.gov/edgar.shtml. The Annual Report includes our consolidated financial statements and the Auditor’s report thereon.

Shareholders registered at the close of business on February 28, 2023 will be entitled to receive this Notice****and to vote at the Meeting.

INFORMATION ON NOTICE AND ACCESS

(You have not been sent a physical copy of the Circular.)

General Information

The Company has prepared this Notice of the Annual General and Special Meeting (the “Notice”) of the Company, which includes Information on Notice and Access, the Circular and a form of proxy relating to the Meeting, and the Circular contains details of the matters to be considered at the Meeting. This Notice has been prepared and mailed to you under the notice and access rules that came into effect on February 11, 2013, pursuant to applicable Canadian securities laws. Notice and access enables issuers to reduce the volume of materials that must be physically mailed to shareholders by posting the information circular and related proxy materials on the Internet. Please call Computershare Investor Services Inc. (“Computershare”) toll-free at 1-800-564-6253 (North American toll free) or 1-514-982-7555 (International) if you have any questions about notice and access procedures.

How to Access the Circular and Obtain a Physical Copy

The Circular and related proxy materials are available under the Company’s profiles on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml, and on the Company’s website at www.westfraser.com. Shareholders are reminded to review these online materials in connection with the Meeting and before voting. Shareholders may obtain a physical copy of the Circular by: (a) calling the Company’s transfer agent, Computershare, toll free at 1-800-564-6253 (North American toll free) or 1-514-982-7555 (International); or (b) emailing a request to Computershare at [email protected]. A request for a physical copy of the Circular should be sent sufficiently in advance so that it is received by Computershare by April 4, 2023, in order to allow sufficient time for the Company to mail, and the Shareholder to receive, the physical copy of the Circular and return the completed form of proxy before the Proxy Deadline (defined below).

Forms of Proxy and Voting Instruction Forms (“VIFs”)

Registered Shareholders have received a form of proxy with this Notice. To have proxy votes counted in the voting at the Meeting, the deadline for submitting a completed form of proxy is 11:30 a.m. (Vancouver time) on April 14, 2023 (the “Proxy Deadline”). Please complete, date and sign the form of proxy and deliver it before the Proxy Deadline in accordance with the instructions set out in the form of proxy and in the Circular.

Non-registered Shareholders (as defined in the accompanying Circular) have received a voting instruction form with this Notice. The deadline for returning voting instruction forms is specified within the form itself. Voting instruction forms, whether provided by the Company or an intermediary, should be completed and returned in accordance with the specific instructions, and by the deadline specified, within the form. Please ensure you carefully follow the instructions set out in the voting instruction form, including those specifying to where and when the form is to be returned.

Please review the Circular before completing your form of proxy or voting instruction form, as the Circular contains additional information about each matter to be voted on at the Meeting. The following guide will assist you in locating the relevant disclosure for each matter.

For disclosure about:	Refer to the following section(s) in the Circular
• the fixing<br>of the number of Directors at eleven	“Size of Board”
• the<br>election of Directors	“Information Regarding Nominees for Election as Directors”
• the<br>appointment of the Company’s auditor	“Appointment of the Auditor”
• the<br>approval of the Company’s approach to executive compensation	“Advisory Resolution on the Company’s Approach to Executive Compensation (Say on Pay)”
• the<br>amendment, restatement and continuation of the Company’s shareholder rights plan	“Reconfirmation of the Rights Plan”

A Shareholder who is unable to attend the Meeting in person and who wishes to ensure that suchShareholder’s shares are voted must complete, date and sign an acceptable form of proxy or voting instruction form and deliver it in accordance with the instructions set out in the enclosed form of proxy or voting instruction form and in theCircular.

DATED at Vancouver, B.C., March 9, 2023.

BY ORDER OF THE BOARD
Raymond Ferris
President and Chief Executive Officer

EX-99.2

Exhibit 99.2

LOGO

West Fraser Timber Co. Ltd.

Notice of Annual General and Special

Meeting of Shareholders

To Be Held April 18, 2023

Management Information Circular

Your Participation is Important

Please Take the Time to Vote

WHAT’S INSIDE
INVITATION TO SHAREHOLDERS	1
NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS	1
MANAGEMENT INFORMATION CIRCULAR	1
DEFINITIONS	1
ADDITIONAL INFORMATION REGARDING THE MEETING	5
FREQUENTLY ASKED QUESTIONS	7
VOTING BY NON-REGISTERED SHAREHOLDERS	11
SHAREHOLDER RIGHTS PLAN	12
BUSINESS TO BE TRANSACTED AT THE MEETING	15
INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTORS	17
BOARD RENEWAL	29
DIRECTOR COMPENSATION	32
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS	36
APPOINTMENT OF THE AUDITOR	37
ADVISORY RESOLUTION ON THE COMPANY’S APPROACH TO EXECUTIVE COMPENSATION (SAY ON PAY)	38
RESOLUTION TO RECONFIRM THE SHAREHOLDER RIGHTS PLAN	39
OUR CORPORATE GOVERNANCE POLICIES AND PROCEDURES	46
GOVERNANCE POLICY	46
CHAIR OF THE BOARD	46
GOVERNANCE & NOMINATING COMMITTEE	47
MAJORITY VOTING POLICY	47
ADVANCE NOTICE POLICY	48
CODE OF CONDUCT	48
ANTI-TRUST POLICY	49
CHARTERS	49
MINIMUM EQUITY HOLDING	50
MANDATE OF THE BOARD	51
ESG OVERSIGHT	52
CORPORATE DISCLOSURE POLICY	53
AUDIT COMMITTEE	54
DECISIONS REQUIRING PRIOR APPROVAL<br>BY THE BOARD	55
SHAREHOLDER FEEDBACK AND<br>CONCERNS	55
EXPECTATIONS OF MANAGEMENT	56
COMPOSITION OF THE BOARD	57
BOARD DIVERSITY POLICY	60
SERVING ON OTHER BOARDS	60
COMMITTEES OF THE BOARD	61
ORIENTATION PROGRAM AND CONTINUING<br>EDUCATION	63
MEETING ATTENDANCE RECORD	67
EXECUTIVE COMPENSATION DISCUSSION & ANALYSIS	67
HUMAN RESOURCES & COMPENSATION<br>COMMITTEE RESPONSIBILITY	67
COMPOSITION OF THE HR&C<br>COMMITTEE	68
REPORT ON EXECUTIVE<br>COMPENSATION	68
PERFORMANCE GRAPH	78
EXECUTIVE COMPENSATION	79
SUMMARY COMPENSATION TABLE	80
OPTION GRANTS	81
RS UNITS AND PS UNITS	86
PENSION PLANS	88
SEVERANCE AND CHANGE OF<br>CONTROL AGREEMENTS	91
DIRECTORS’ COMPENSATION AND<br>HOLDINGS	92
INTEREST OF INFORMED PERSONS<br>IN MATERIAL TRANSACTIONS	92
INDEBTEDNESS OF DIRECTORS, OFFICERS<br>AND EMPLOYEES	92
SECURITIES AUTHORIZED FOR ISSUANCE<br>UNDER EQUITY COMPENSATION PLANS	93
ADDITIONAL INFORMATION	93
SCHEDULE “A”	94

INVITATION TO SHAREHOLDERS

We will hold the Meeting inQuesnel, B.C. with a live-webcast option for Shareholders to listen in and view the Meeting and ask questions.

March 9, 2023

Dear Shareholder:

You are invited to attend the annual general and special meeting (the “Meeting”) of shareholders (“Shareholders”) **** of West Fraser Timber Co. Ltd. (the “Company”), which will take place on April 18, 2023 at 11:30 a.m. (Vancouver time) at 1250 Brownmiller Road, Quesnel, B.C. Additionally, through the online meeting platform, Registered Shareholders and proxyholders (including non-registered Shareholders who have duly appointed themselves as proxyholder) will have a live-webcast option at https://web.lumiagm.com/433290564, password “westfraser2023” (case sensitive) to be able to listen in and view the Meeting and ask questions.

The items of business to be considered at the Meeting are described in the accompanying notice of annual general and special meeting (the “Notice”) and management information circular (the “Circular”).

Your participation and views are very important to us. You are encouraged to vote, which can be done by following the instructions enclosed with these materials. Whether or not you plan to attend the Meeting, please submit your vote as soon as possible to ensure your views are represented at the Meeting. You can vote online or by phone, fax, mail or in person at the Meeting.

At the Meeting, in addition to dealing with the matters described in the Notice, we will review the affairs of the Company. Also, you willhave an opportunity to ask questions.

All of our public documents, including the annual report of the Company for the financial year ended December 31, 2022 and quarterly reports, are available on our website at www.westfraser.com. You are encouraged to access our website during the year for continuous disclosure items, including news releases and investor presentations.

We look forward to your participation at the Meeting.

Yours sincerely,
Raymond Ferris
President and Chief Executive Officer

NOTICE OF ANNUAL GENERAL AND SPECIAL MEETING OF SHAREHOLDERS

We will hold the Meeting in Quesnel, B.C. Additionally, a live-webcast option will be provided for Shareholders to listen in and view theMeeting and ask questions.

1.	to receive the consolidated financial statements of the Company for the financial years ended<br>December 31, 2022 and 2021, together with the Auditor’s report on them;
2.	to fix the number of Directors at eleven;
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3.	to elect the Directors to hold office until the close of the next annual meeting of Shareholders;<br>
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4.	to appoint an auditor of the Company to serve until the close of the next annual meeting of Shareholders and<br>to authorize the Directors to fix the auditor’s remuneration;
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5.	to consider an advisory (non-binding) resolution on the<br>Company’s approach to executive compensation, as more particularly set out in the section of the accompanying Circular entitled “Advisory Resolution on the Company’s Approach to Executive Compensation (Say on Pay)”; and<br>
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6.	to consider and, if deemed appropriate, pass, with or without variation, an ordinary resolution confirming<br>and approving the amendment, restatement and continuation of the Shareholder Rights Plan (see “Business to be Transacted at the Meeting — Reconfirmation of Shareholder Rights Plan” in the accompanying Circular).
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Shareholders registered at the close of business on February 28, 2023 will be entitled to receive this Notice****and to vote at the Meeting.

INFORMATION ON NOTICE AND ACCESS

(You have not been sent a physical copy of the Circular.)

General Information

How to Access the Circular and Obtain a Physical Copy

Forms of Proxy and Voting Instruction Forms (“VIFs”)

For disclosure about:	Refer to the following section(s) in the Circular
• the fixing of the number of Directors at eleven	“Size of Board”
• the election of Directors	“Information Regarding Nominees for Election as Directors”
• the appointment of the Company’s auditor	“Appointment of the Auditor”
• the approval of the Company’s approach to executive compensation	“Advisory Resolution on the Company’s Approach to Executive Compensation (Say on Pay)”
• the amendment, restatement and continuation of the Company’s shareholder rights<br>plan	“Reconfirmation of the Rights Plan”

DATED at Vancouver, B.C., March 9, 2023.

BY ORDER OF THE BOARD
Raymond Ferris
President and Chief Executive Officer

MANAGEMENT INFORMATION CIRCULAR

(As of the Record Date, except as otherwise provided)

This Circular is furnished in connection with the solicitation of proxies by the management of West Fraser for use at the Meeting to be held on April 18, 2023 at 11:30 a.m. (Vancouver time) in Quesnel, B.C. (and at any adjournment thereof) for the purposes set out in the attached Notice.

DEFINITIONS

Unless stated otherwise, in this Circular:

“2023 NCIB” has the meaning set out in “Voting Securities and Principal Shareholders – Share Repurchases”;

“2022 NCIB” has the meaning set out in “Voting Securities and Principal Shareholders – Share Repurchases”;

“$” means Canadian dollars;

“Annual Information Form” means the annual information form of the Company for the financial year ended December 31, 2022;

“Annual Report” means the annual report of the Company for the financial year ended December 31, 2022;

“Articles” means the latest Notice of Articles issued by the British Columbia Registrar of Companies and the corporate Articles of the Company;

“Auditor” means our external auditor, currently PricewaterhouseCoopers LLP;

“B.C.” means British Columbia;

“BCA” means the Business Corporations Act (British Columbia), R.S.B.C. 2002, c.57, as amended;

“Board” or “Board of Directors” means our board of Directors as presently constituted or proposed to be constituted;

“Bonus Plan” has the meaning set out in “Executive Compensation Discussion & Analysis – Report on Executive Compensation – Annual Incentive Bonus Plan”;

“Cash Value Alternative” has the meaning set out in “Executive Compensation Discussion & Analysis – Report on Executive Compensation – Long-Term Incentive Component – Stock Option Plan – Annual Burn Rate”;

“CEO” means our Chief Executive Officer;

“CFO” means our Chief Financial Officer;

“Chair” or “Chair of the Board” has the meaning set out in “Our Corporate Governance Policies and Procedures – Chairman of the Board”;

“Circular” means this management information circular;

“Class B Shares” means the Class B Common shares in the capital of West Fraser;

“Closing Price” has the meaning set out in “Information Regarding Nominees for Election as Directors –Director Compensation – Direct and Indirect Share and Other Holdings of Current and Proposed Directors (as at the Record Date)”;

“Code” means the United States Internal Revenue Code of 1986, as amended;

“Code of Conduct” has the meaning set out in “Our Corporate Governance Policies and Procedures – Code of Conduct”;

“Committees” means the committees of the Board;

“Computershare” means Computershare Investor Services Inc., our transfer agent;

“Corporate Disclosure Policy” has the meaning set out in “Our Corporate Governance Policies and Procedures – Corporate Disclosure Policy”;

“Director” means a director of the Company;

“Disclosure Committee” has the meaning set out in “Our Corporate Governance Policies and Procedures – Corporate Disclosure Policy”;

“DSU Plan” means our Director Deferred Share Unit Plan;

“DS Unit” means a Deferred Share Unit granted under our DSU Plan;

“EDGAR” means the U.S. Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval system;

“Equity Holding Requirements Policy” has the meaning set out in “Executive Compensation Discussion – Report on Executive Compensation & Analysis – Executive Equity Holding Requirements”;

“Exchange Ratio” means the exchange ratio of 0.675 of a Common share for each Norbord Share acquired by the Company in connection with the Norbord Acquisition;

“Governance Committee” means the Governance & Nominating Committee of the Board;

“Governance Policy” has the meaning set out in “Our Corporate Governance Policies and Procedures – Governance Policy”;

“HR&C Committee” means the Human Resources & Compensation Committee of the Board;

“Meeting” means the annual general and special meeting of Shareholders to be held on April 18, 2023 and any adjournment of it;

“NI 52-110” has the meaning set out in “Our Corporate Governance Policies and Procedures – Composition of the Board – Independence”;

“NI 54-101” means National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer;

“Non-registered Shareholder” means any Shareholder who is not a Registered Shareholder;

“Notice” means the notice of annual general and special meeting of Shareholders, which accompanies this Circular;

“Norbord” means Norbord Inc.;

“Norbord Acquisition” means the acquisition by the Company of all of the issued and outstanding Norbord Shares, which occurred on February 1, 2021;

“Norbord Continuing Executives” means the holders of Norbord Options, Norbord RSUs and Norbord DSUs who have continued as officers and employees of the Company following completion of the Norbord Acquisition;

“Norbord DSUs” means the outstanding deferred share units credited under certain Norbord deferred share unit plans, which have been adjusted by the Exchange Ratio and are to be paid out in reference to the Common shares following completion of the Norbord Acquisition;

“Norbord Options” means the outstanding options to purchase Norbord Shares granted under or otherwise subject to certain Norbord stock option plans, which have been exchanged for, or are otherwise characterized as, Replacement Options following completion of the Norbord Acquisition;

“Norbord RSUs” means the outstanding restricted share units credited under the Norbord restricted share unit plan, which have been adjusted by the Exchange Ratio and are to be paid out in reference to the Common shares following completion of the Norbord Acquisition;

“Norbord Shares” means the common shares in the capital of Norbord;

“NYSE” means the New York Stock Exchange;

“Options” means share purchase options granted under the Stock Option Plan;

“Phantom Share Unit Plan” means the plan described as set out in “Executive Compensation Discussion & Analysis – Report on Executive Compensation – Long-Term Incentive Component – Phantom Share Unit Plan”;

“PSUnit” or “PSU” means a performance share unit granted under our Phantom Share Unit Plan;

“RecordDate” means February 28, 2023;

“Registered Shareholder” means a Shareholder who is in possession of a physical share certificate registered in their name or who appears as the Registered Shareholder in the records of Computershare;

“Replacement Option Plans” has the meaning set out in “Executive Compensation Discussion & Analysis – Option Grants – Description of Replacement Option Plans”;

“Replacement Options” means the options to purchase Common shares that are held by former holders of Norbord Options following completion of the Norbord Acquisition;

“Rights Plan” has the meaning set out in “Voting and Proxies: Questions and Answers” under the heading “Shareholder Rights Plan” on page 12;

“ROSE” has the meaning set out in “Executive Compensation Discussion & Analysis – Report on Executive Compensation – Annual Incentive Bonus Plan”;

“RS Unit” means a restricted share unit granted under our Phantom Share Unit Plan;

“SEC” means the U.S. Securities and Exchange Commission;

“SEDAR” means the System for Electronic Document Analysis and Retrieval, a filing system developed for the Canadian securities regulatory authorities;

“Shares” or “Common shares” means the common shares in the capital of West Fraser, as currently constituted and that are currently listed and posted for trading on the TSX and the NYSE under the symbol “WFG”;

“SIB” has the meaning set out in “Voting Securities and Principal Shareholders – Share Repurchases”;

“Shareholder” means a holder of any Share or Class B Share, as the context requires;

“Stock Dividend” means the stock dividend of one Common share declared and issued in respect of each issued and outstanding Common share in the capital of the Company and each issued and outstanding Class B Share and paid to Shareholders on January 13, 2014;

“Stock Option Plan” means the West Fraser Timber Co. Ltd. Stock Option Plan, as amended;

“Towers Watson” has the meaning set out in “Executive Compensation Discussion & Analysis – Report on Executive Compensation”;

“TSR” has the meaning set out in “Executive Compensation Discussion & Analysis – Report on Executive Compensation – Long-Term Incentive Component – Phantom Share Unit Plan”;

“TSX” means the Toronto Stock Exchange;

“U.S.” means the United States of America, its territories, any State of the United States and the District of Columbia;

“U.S. ESPP” means the United States Employee Stock Purchase Plan;

“VWAP” means Volume Weighted Average Price; and

“West Fraser”, “Company”, “we”, “us” or “our” means West Fraser Timber Co. Ltd.

ADDITIONAL INFORMATION REGARDING THE MEETING

We will hold the Meeting in Quesnel, B.C. Additionally, a live-webcast option will be provided to Shareholders to listen in and view the Meeting and askquestions. Shareholders will be able to access the live-webcast will at https://web.lumiagm.com/433290564, password “westfraser2023” (casesensitive) , where they can listen in and view the Meeting and ask questions.

Registered Shareholders and duly appointed proxyholders (including Non-registered Shareholders who have duly appointed themselves as proxyholder) will have a live-webcast option where they can listen in and view the Meeting and ask questions, provided they are connected to the Internet and follow the instructions in this Circular. Non-registered Shareholders who have not duly appointed themselves as proxyholder will be able to use the live-webcast option as guests but will not be able to ask questions.

Shareholders who wish to appoint a person other than the management nominees identified in the form of proxy or voting instruction form (including a Non-registered Shareholder who wishes to appoint themselves as their own proxy to use the live webcast) must carefully follow the instructions set out in this Circular and on their form of proxy or voting instruction form. These instructions include the additional step of registering such proxyholder with Computershare, after submitting the form of proxy or voting instruction form. Failure to register the proxyholder with Computershare will result in the proxyholder not receiving a 15 -digit control number required to ask questions in the Meeting, which would only allowthe proxyholder to attend the Meeting as a guest. Guests will be able only to listen to the Meeting but will not be able to ask questions.

Your vote is important. Good corporate governance begins with Shareholder participation. If you cannot attend the Meeting or if you plan toattend but prefer the convenience of voting in advance, we encourage you to exercise your vote using either of the voting methods described below. Please read pages 7 through 14 for answers to commonly asked questions regarding voting and proxies.

How to Vote

You have two ways to vote:

1.	you may vote in person at the Meeting; or
2.	by submitting your form of proxy or voting instruction form in accordance with the instructions set out<br>therein.
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If a Registered Shareholder is a body corporate or association, the form of proxy must be signed by a person duly authorized by that body corporate or association. Completing, signing and returning a form of proxy will not prevent you from attending the Meeting in person. As the Company is relying on notice and access provisions of applicable Canadian securities laws, the Notice and form of proxy is being sent to Registered Shareholders.

How to Ask Questions at the Meeting

Shareholders will have an opportunity to ask questions in person and online (as applicable) by following the procedures set out below.

1.	Registered Shareholders and proxyholders (including Non-registered<br>Shareholders who have duly appointed themselves as proxyholder) attending the Meeting in person will have an opportunity to ask questions at the Meeting during the Q&A session.

Registered Shareholders and proxyholders (including Non-registered Shareholders who have duly appointed themselves as proxyholder) following the Meeting online will have an opportunity to ask questions through the webcast platform. To do so, they will need to obtain a control number by following the instructions provided below. Once they have registered and obtained a control number and are logged into the online platform, they should select the messaging icon and type the question within the chat box at the bottom of the messaging screen. Once satisfied with the question, the Shareholder or proxyholder should click the arrow button to submit the question to the Chair of the Meeting. All submitted questions will be moderated before being sent to the Chair of the Meeting. Questions can be submitted at any time during the Q&A session up until the Chair of the Meeting closes the session.

It is anticipated that Shareholders will have substantially the same opportunity to ask questions online on matters of business during the Meeting as if they attend the Meeting in person.

How Shareholders and appointees can obtain a control number to ask questions during the Meeting

●	Registered Shareholders: Registered Shareholders can find their control number on their proxy form.<br>
●	Non-registered Shareholders and Appointees: Non-registered Shareholders and duly appointed proxyholders must complete the additional step of registering as a proxyholder by calling Computershare at 1-800-564-6253 (North American toll free) or<br>1-514-982-7555 (International) by no later than 11:30 a.m. (Vancouver time) on April 14, 2023. Non-registered Shareholders and proxyholders who have not appointed themselves as proxyholder will not receive a control number, which is required to ask questions at the Meeting.
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●

Registered Shareholders: Registered Shareholders can find their control number on their proxy form.

●

Non-registered Shareholders and Appointees: Non-registered Shareholders and duly appointed proxyholders must complete the additional step of registering as a proxyholder by calling Computershare at 1-800-564-6253 (North American toll free) or 1-514-982-7555 (International) by no later than 11:30 a.m. (Vancouver time) on April 14, 2023. Non-registered Shareholders and proxyholders who have not appointed themselves as proxyholder will not receive a control number, which is required to ask questions at the Meeting.

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Non-registered Shareholders who have not duly appointed themselves as proxyholder and registered with Computershare will not be able to ask questions at the Meeting but will be able to follow the proceedings as a guest.

Technical Assistance

Shareholders with questions regarding the live-webcast platform or requiring assistance accessing the Meeting website should visit the provider’s website at https://www.lumiglobal.com/faq. Furthermore, should a Shareholder wish to speak with a Computershare representative concerning the live-webcast, both a live chat service and a contact ticket system are available through the website above.

If you are accessing the Meeting using the live-webcast, you must remain connected to the Internet at all times during the Meeting in order to listen in, view the Meeting and ask questions. It is your responsibility to ensure Internet connectivity for the duration of the Meeting. Note that if you lose connectivity once the Meeting has commenced, there may be insufficient time to resolve your issue before the Meeting is completed.

FREQUENTLY ASKED QUESTIONS

Q.	Am I entitled to vote?

A. Holders of Shares at the close of business on the Record Date of February 28, 2023 and their duly appointed representatives are eligible to vote. Each Share is entitled to one vote.

Q.	How do I vote?

A. If you are a Registered Shareholder, you may vote your Shares by appointing a proxyholder to attend the Meeting and vote on your behalf. Voting by proxy is the easiest way to vote because you do not have to attend the Meeting. Instead, you appoint the persons named in the form of proxy or another person or entity of your choosing, who need not be a Shareholder, to represent you as a proxyholder and vote your Shares at the Meeting. A proxy will not be valid unless it is dated and signed by the Registered Shareholder or by the Registered Shareholder’s attorney with proof that they are authorized to sign, and is completed according to the instructions therein.

There are different ways to submit your voting instructions depending on whether you are a Registered Shareholder or a Non-registered Shareholder. If your Shares are held in an account with a bank, trust company, securities broker, trustee or other intermediary, please refer to “Voting by Non-registered Shareholders”.

See “How to Vote” for further details on how to vote.

Q.	What am I voting on?
A.	You will be asked to vote on the following matters:
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●	fixing the number of Directors at 11;
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●	the election of Directors to hold office until the close of the next annual meeting of Shareholders;<br>
---	---
●	the appointment of PricewaterhouseCoopers LLP as our auditor until the close of the next annual meeting of<br>Shareholders, at a remuneration to be fixed by the Directors;
---	---
●	the advisory (non-binding) resolution on the Company’s approach<br>to executive compensation; and
---	---
●	the amendment, restatement and continuation of the Company’s Shareholder Rights Plan.<br>
---	---
Q.	What if amendments are made to these matters or if other matters are brought before the Meeting?
---	---

A. If you attend the Meeting and are eligible to vote, you may vote on such matters as you choose.

If you have completed and returned a proxy in the form enclosed, the persons named in it will have discretionary authority with respect to amendments or variations to matters identified in the Notice and to other matters which properly come before the Meeting. If any other matter properly comes before the Meeting, the persons so named will vote on it in accordance with their best judgment. As of the date of this

Circular, our management does not know of any such amendment, variation or other matter expected to come before the Meeting.

Q.	Who is soliciting my proxy?

A. The management of West Fraser is soliciting your proxy. Solicitation of proxies is done primarily by mail, supplemented by telephone or other contact, by Company employees, and the Company bears all associated costs.

This Circular is prepared under the notice and access rules that came into effect on February 11, 2013 pursuant to applicable Canadian securities laws. Accordingly, this Circular is being posted on the Internet instead of being mailed to either Registered Shareholders or Non-registered Shareholders. This Circular and related proxy materials are available under the Company’s profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml, and on the Company’s website at www.westfraser.com/. Shareholders are reminded to review these materials online in connection with the Meeting and before voting. Shareholders may obtain a physical copy of this Circular by: (a) calling Computershare, toll free at****1-800-564-6253 (North American toll free) or 1-514-982-7555 (International); or (b) emailing a request to Computershare at [email protected]. A request for a physical copy of this Circular should be sent sufficiently in advance so that it is received by Computershare by April 4, 2023 in order to allow sufficient time for the Shareholder to receive the physical copy of this Circular and return the proxy by its due date.

Q.	How do I know if I am a “Registered” Shareholder or a“Non-registered” Shareholder?

A. You may own Shares in one or both of the following ways:

1. If you are in possession of a physical share certificate in your name or you appear as the Registered Shareholder in the records of Computershare, you are a “Registered Shareholder” and your name and address are known to West Fraser through Computershare.

2. If you own Shares through a bank, trust company, securities broker, trustee or other intermediary, you are a “Non-registered Shareholder” and you will not have a physical share certificate. In this case, you will have an account statement from your bank or broker as evidence of your Share ownership.

Most Shareholders are Non-registered Shareholders. The Shares of Non-registered Shareholders are registered in the name of an intermediary, such as a bank, trust company, securities broker, trustee, custodian or other nominee who holds the Shares in a nominee account or in the name of such nominee, or in the name of a clearing agency in which the intermediary is a participant (such as CDS). Intermediaries have obligations to forward Meeting materials to such Non-registered Shareholders unless instructed otherwise by the holder (and as required by regulation in some cases, despite such instructions).

Non-registered Shareholders fall into two categories — those who object to their identity being known to the issuers of the securities which they own (“OBOs”) and those who do not object to their identity being made known to the issuers of the securities which they own (“NOBOs”). Subject to the provisions of NI 54-101, issuers may request and obtain a list of their NOBOs from intermediaries directly or via their transfer agent and may obtain and use the NOBO list for the distribution of proxy-related materials to such NOBOs. These securityholder materials are being sent to both registered and non-registered owners of securities of the Company. If you are a non-registered owner (a NOBO or an OBO) and the Company or its agent has sent the Meeting materials directlyto you, your name, address and information about your holdings of Common shares have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding the Common shares on your behalf. The Company’s OBOs

can expect to be contacted by their intermediary. The Company does not intend to pay for intermediaries to deliver the Meeting materials to OBOs and it is the responsibility of such intermediaries to ensure delivery of the Meeting materials to their OBOs.

Q.	Must I use the enclosed form of proxy?

A. No. If you do not wish to use the enclosed proxy form, you may use any other form of proxy to appoint your proxyholder, although the Articles require that a form of proxy be substantially in the form enclosed.

Q.	Can I appoint someone to vote my Shares other than persons named in the enclosed form of proxy?

A. Yes. Shareholders who wish to appoint a person other than the management nominees identified in the form of proxy or voting instruction form (including a Non-registered Shareholder who wishes to appoint themselves as their own proxy to attend the Meeting) must carefully follow the instructions in this Circular and on their form of proxy or voting instruction form. These instructions include the additional step of registering such proxyholder with Computershare, after submitting the form of proxy or voting instruction form. Failure to register the proxyholder with Computershare, which will result in the proxyholder not receiving a 15-digit control number to ask questions in the Meeting and, consequently such proxyholder will only be able to follow the Meeting as a guest. Guests may only listen to the Meeting but will not be able to ask questions.

Q.	What if my Shares are registered in more than one name or in the name of my company?

A. If your Shares are registered in more than one name, all those registered must sign the form of proxy. If your Shares are registered in the name of your company or any name other than yours, we may require that you provide documentation that proves you are authorized to sign the form of proxy.

Q.	What if I plan to attend the Meeting and vote at the Meeting?

A. If you are a Registered Shareholder and plan to attend the Meeting and you wish to vote your Shares at the Meeting, do not complete or return a form of proxy. Your vote will be taken and counted at the Meeting.

If your Shares are not registered in your name, but you wish to attend the Meeting, please see “Voting by Non-registered Shareholders”.

Q.	What happens when I sign and return a form of proxy?

A. You will have given authority to whomever you have appointed as your proxyholder to vote your Shares at the Meeting in accordance with the voting instructions you provide.

Q.	What do I do with my completed form of proxy?

A. You must deposit your completed form of proxy (by mail, telephone, fax or online) with Computershare no later than 11:30 a.m. (Vancouver time) on April 14, 2023, or at least 48 hours (excluding Saturdays, Sundays and holidays) prior to the time of any adjournment or postponement of the Meeting. The Chair of the Meeting has the discretion to accept or reject any late proxies, and can waive or extend the deadline for receiving proxy voting instructions without notice. If you hold Shares through an intermediary you should refer to “Voting by Non-registered Shareholders”.

Q.	How will my Shares be voted if my proxy is in the enclosed form with no other person named asproxyholder?

A. The persons named in it will vote or withhold from voting your Shares in accordance with your instructions. In the absence of such instructions, however, your Shares will be voted FOR fixing the number of Directors at 11, FOR the election of the Directors nominated by management, FOR the appointment ofthe Auditor, FOR the advisory (non-binding) resolution on the Company’s approach to executive compensation, and FOR the resolution to amend, reconfirm and continue the Company’s Rights Plan.

Q.	If I change my mind, can I revoke my proxy once I have given it?

A. In addition to revocation in any other manner permitted by law, a Registered Shareholder who has completed a form of proxy may revoke it by:

●	executing a new form of proxy bearing a later date or by executing a valid notice of revocation, either of the<br>foregoing to be executed by the Registered Shareholder or the Registered Shareholder’s authorized attorney in writing or, if the Registered Shareholder is a corporation, under its corporate seal by an officer or attorney duly authorized, and by<br>delivering the form of proxy bearing a later date or notice of revocation to Computershare, or to the Company’s registered office at Royal Centre, Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7, at any time up to and<br>including the last business day that precedes the day of the Meeting or, if the Meeting is adjourned, the last business day that precedes any reconvening thereof, or to the chairman of the Meeting on the day of the Meeting or any reconvening<br>thereof, or in any other manner provided by law; or
●	personally attending the Meeting and voting at the Meeting.
---	---

●

executing a new form of proxy bearing a later date or by executing a valid notice of revocation, either of the foregoing to be executed by the Registered Shareholder or the Registered Shareholder’s authorized attorney in writing or, if the Registered Shareholder is a corporation, under its corporate seal by an officer or attorney duly authorized, and by delivering the form of proxy bearing a later date or notice of revocation to Computershare, or to the Company’s registered office at Royal Centre, Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7, at any time up to and including the last business day that precedes the day of the Meeting or, if the Meeting is adjourned, the last business day that precedes any reconvening thereof, or to the chairman of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner provided by law; or

●

personally attending the Meeting and voting at the Meeting.

---

A revocation of a form of proxy will not affect a matter on which a vote is taken before the revocation.

Non-registered Shareholders who wish to change their vote must, within sufficient time in advance of the Meeting, arrange for their respective intermediaries to change their vote.

Q.	What documents are sent to Shareholders?

A. Registered Shareholders who have provided us with the required request will receive a package of the usual annual corporate documents (our Annual Report, our consolidated financial statements for the years ended December 31, 2022 and 2021 and Auditor’s report and management’s discussion and analysis thereon), along with the Notice and the form of proxy.

Our Circular may be accessed under our profile on SEDAR at www.sedar.com, on EDGAR at www.sec.gov/edgar.shtml, and on our website at www.westfraser.com.

Copies of our Annual Report, including our consolidated financial statements and Auditor’s report and management’s discussion and analysis thereon, are filed with Canadian securities regulators and are available under the Company’s profiles on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml, and may also be obtained, without charge, upon request by contacting Robert B. Winslow, CFA, Director, Investor Relations & Corporate Development at (416) 777-4426 or by email at [email protected].

Q.	Who are our Principal Shareholders?

A. The Principal Shareholders (persons or companies that beneficially own or exercise control or direction over, directly or indirectly, more than 10% of a class of our outstanding Shares) are set out in this Circular under the heading “Voting Securities and Principal Shareholders”.

Q.	What if I have other questions?

A. If you have a question regarding the Meeting, please contact our transfer agent as set out below, the General Counsel of the Company at (604) 895-2700 or by email at [email protected].

Q.	How can I contact the transfer agent?

A. You can contact the transfer agent at:

Computershare Investor Services Inc.

8^th^ Floor, 100 University Avenue

Toronto, Ontario M5J 2Y1

Phone 1-800-564-6253 (North American toll free) or

514-982-7555 (International).

Fax 1-866-249-7775 (toll free North America- Int’l 416-263-9524)

Online www.computershare.com/service

VOTING BY NON-REGISTERED SHAREHOLDERS

Q.	If my Shares are not registered in my name, how do I vote my Shares?

A. Our share register does not list Non-registered Shareholders. The Shares of Non-registered Shareholders are usually held in the name of an intermediary or a “nominee”, such as a trust company, securities broker or other financial institution. If you are a Non-registered Shareholder, there are two ways that you can vote your Shares:

1.	By providing voting instructions to your nominee

Applicable securities laws require institutional nominees to seek voting instructions from you in advance of the Meeting. Accordingly, you will receive, or have already received with these materials, from your nominee, either a voting instruction form or a form of proxy for the number of Shares you hold with that nominee. Every institutional nominee has its own mailing procedures and provides its own signing and return instructions, which you should follow carefully to ensure that your Shares are voted at the Meeting.

As the Company is relying on notice and access provisions of applicable Canadian securities law, the Notice and voting instruction form are being sent to both Non-registered Shareholders and Registered Shareholders.

2.	By being appointed as Proxy and attending the Meeting

The Company generally does not have access to the names of its Non-registered Shareholders. Therefore, if you attend the Meeting, the Company will have no record of your shareholdings or of your entitlement to vote unless you have directed your nominee to appoint you as proxyholder.

If you wish to attend the Meeting and vote your Shares, insert your own name in the space provided on the voting instruction form or form of proxy provided by your nominee to appoint yourself as proxyholder. If you are a Non-registered Shareholder and instruct your nominee to appoint yourself as proxyholder, you

must follow the additional steps set out above under the heading “How to Vote – How Non-registered Shareholders/Appointees can obtain a control number to vote during the Meeting”.

SHAREHOLDERRIGHTS PLAN

Q.	What is the Rights Plan?

A. The Company adopted the shareholder rights plan (the “Rights Plan”) effective April 9, 2020. At the Meeting, you will be asked to consider and, if deemed advisable, pass a resolution, confirming and approving the amendment, restatement and continuation of the Rights Plan. The Rights Plan is an arrangement that gives holders of Common shares of West Fraser, other than a person that acquires above a specified threshold (20% or more) of the Company’s Common shares, the right to acquire additional Common shares of West Fraser at a discounted price in certain circumstances as described below. The Rights Plan encourages fair treatment of West Fraser Shareholders in connection with a take-over bid and protects against “creeping bids” (the accumulation of more than 20% of the Company’s shares through purchases exempt from the formal take-over bid rules). Page 39 of the Circular, under the heading “Resolution to Reconfirm the Shareholder Rights Plan”, provides detailed information regarding the Rights Plan.

Q.	Why is the Rights Plan being amended and restated?

A. At a meeting on February 14, 2023, the Board approved, subject to the approval of Shareholders, the continuation of the Rights Plan on the terms and conditions of the Rights Plan between the Company and Computershare Trust Company of Canada, as successor to TSX Trust Company (“TSX Trust”) (formerly AST Trust Company (Canada)), as Rights Agent. The Rights Plan includes amendments to reflect the appointment of Computershare as successor to TSX Trust Company. The change of Rights Agent to Computershare under the Rights Plan was effective as of November 1, 2021 pursuant to a Successor Rights Plan Agreement entered into between the Company, Computershare and TSX Trust. The Rights Plan does not include any substantive change to the Rights outstanding under the original Rights Plan and represents a continuation of the original Rights Plan, with Computershare as the Rights Agent.

Q.	Why is West Fraser Reconfirming and Continuing the Rights Plan?

A. The Company believes it is appropriate to renew and continue the Rights Plan to protect Shareholders. In accordance with its terms, the Rights Plan must be reconfirmed by Shareholders every three years. The Company adopted the Rights Plan effective April 9, 2020 and it was ratified and approved by the Shareholders at the annual general meeting held on May 26, 2020. The Rights Plan has a term of nine years, subject to approval of its continuance by the Shareholders of the Company at the annual meetings of the Company in 2023 and 2026. Failing reconfirmation as required under the Rights Plan, the Rights Plan and all outstanding Rights thereunder will terminate at the conclusion of the Meeting.

The basic objectives of the Rights Plan are to:

●	help ensure that West Fraser Shareholders are treated fairly in connection with any take-over bid made for the<br>Company;
●	provide all West Fraser Shareholders with an equal opportunity to participate in such a take-over bid;<br>
---	---
●	provide the Board with sufficient time to consider and, if appropriate, to develop alternatives for enhancing<br>shareholder value;
---	---
●	deter abusive tactics by making them unacceptably expensive to unsolicited bidders;
---	---

●	encourage prospective acquirors to negotiate with the Board rather than to attempt an unsolicited hostile<br>take-over; and
●	prevent “creeping bids” (the accumulation of more than 20% of the Company’s Common shares<br>through purchases exempt from the take-over bid rules) and “hard” lock-up agreements (agreements with an offeror under which existing Shareholders commit to tender their shares to the offeror’s<br>take-over bid which agreements are either irrevocable or revocable but subject to restrictive termination conditions). See page 39 of the Circular, under the heading “Resolution to Reconfirm the Shareholder Rights Plan”, for further<br>details on “creeping bids” and “hard” lock-up agreements.
---	---
Q.:	Has West Fraser received a take-over offer?
---	---

A. No. As at the date hereof, West Fraser is not aware of any pending or threatened take-over bid for the Company and the Rights Plan is not being adopted in response to or in anticipation of any pending or threatened take-over bid, nor to deter take-over bids generally, but to encourage fair treatment of West Fraser Shareholders in connection with a take-over bid and to protect against creeping bids.

Q.	How does the Rights Plan work?

A. The Rights Plan is an agreement granting the holders of Common shares certain rights (the “Rights”) to acquire additional Common shares at a discounted price which they may exercise only upon the occurrence of a specified set of events. The Rights are interests which “attach” to Common shares outstanding on April 9, 2020 and to Common shares issued after that date. The Rights Plan encourages a potential acquiror to proceed either by way of a “Permitted Bid” (described below), which requires the take-over bid to satisfy certain minimum standards designed to promote fairness, or with the concurrence of the Board.

Q.	What are the Permitted Bid Requirements?

A. The following is a summary of the primary Permitted Bid requirements:

●	the take-over bid must be made to all holders of Common shares other than the offeror;
●	the take-over bid must be open to Shareholders for a period of not less than 105 days and the offeror may only<br>take-up and pay for the shares if over 50% of the shares have been tendered to the offer; and
---	---
●	the take-over offer must also provide that any shares deposited pursuant to the offer may be withdrawn until<br>taken up and paid for.
---	---

There are additional requirements that must be met in order for a take-over offer to be a “Permitted Bid” and those requirements are summarized on page 39 of the Circular under the heading “Resolution to Reconfirm the Shareholder Rights Plan”.

Q.	What Rights are outstanding?

A: Effective April 9, 2020, holders of Common shares received one Right per Common share that they owned. The Rights are interests that attach to Common shares. Thus, if the Common shares were sold or purchased, the Rights were sold or purchased with such Common shares.Shareholders did not and will not receive a separate Rights certificate in the mail and will not need to do anything at this time. If the Rights become exercisable, West Fraser’s designated rights agent will forward additional documentation at that time.

Q.	Can the Rights be sold?

A. The Rights cannot be sold or conveyed separately from the Common shares to which they relate, unless they become exercisable as described herein. The Rights are interests that attach to Common shares. Thus, if you sell the Common shares, the Rights are sold with the shares.

Q.	Has the Board approved the Rights Plan?

A. Yes. The Board has approved the amendment, restatement and continuation of the Rights Plan. The Board believes that the Rights Plan is in the best interests of West Fraser and our Shareholders. The Board unanimously recommends that Shareholders vote FOR the Rights Plan. In the opinion of the Board, the Rights Plan is consistent with the current practices of Canadian public companies with respect to shareholder rights plans.

Q.	What are Shareholders being asked to approve?

A. Shareholders will be asked to consider an ordinary resolution reconfirming and continuing the Rights Plan. The text of the resolution is included on page 39 of the Circular, under the heading “Resolution to Reconfirm the Shareholder Rights Plan”. Ratification and approval of the Rights Plan by Shareholders is required by the rules of the TSX. If the resolution is not passed, the Rights Plan will terminate as of the close of the meeting.

Q.	Will the issuance of Rights be taxable?

A. The Company considers that the Rights have negligible value when issued, and the issuance of the Rights is not expected to be taxable to holders of Common shares.

Q.	Do other companies have shareholder rights plans?

A. Rights plans have been adopted and reconfirmed by a large number of publicly held companies in Canada. The Management of the Company has reviewed the Rights Plan for conformity with current practices of Company’s peers and other dual-listed Canadian issuers with respect to shareholder rights plan design and has confirmed to the Board that the terms of the Rights Plan are substantially similar to those plans. Based on this review, the Board has determined that it is advisable and in the best interests of the Company and its Shareholders that the Company continue to have in place a shareholder rights plan in the form of the Rights Plan.

BUSINESS TO BE TRANSACTED AT THE MEETING

(See Notice of Annual Meeting of Shareholders)

1)Presentation of Financial Statements

The consolidated financial statements of the Company for the financial years ended December 31, 2022 and 2021 and the Auditor’s report thereon will be submitted to Shareholders at the Meeting, but no vote with respect to them is required or proposed to be taken. The consolidated financial statements are included in our Annual Report which is being mailed to those Shareholders who have provided us with the required request.

2)Fixing the Number and Election of Directors

Robert Phillips has decided not to stand for re-election as a Director. Management is nominating Doyle Beneby as a new Director along with the other 10 current Directors. As a result, management is seeking approval to fix the number of Directors at 11.

The table of nominees on the following pages sets out the name, background and experience of each person proposed to be nominated for election as a Director, as well as other relevant information. Management of the Company recommends the election of the 11 nominees set out in the table of nominees to fill the 11 positions as Director. The term of office of each current Director will expire at the conclusion of the Meeting. Each Director elected at the Meeting will hold office until the conclusion of the next annual meeting of Shareholders at which a successor Director is elected, unless the Director’s office is earlier vacated in accordance with the Articles or the provisions of the BCA.

The Board of Directors has adopted a majority voting policy, which is described under the heading “Majority Voting Policy”, relating to the election of Directors.

On February 13, 2014, the Board adopted an advance notice policy setting out requirements for Director nominations and elections. On April 29, 2014, our Shareholders approved a special resolution to amend the Articles to include this advance notice requirement, which is described under the heading “Advance Notice Policy”.

The Board of Directors may fill vacancies on the Board resulting from the death, resignation or retirement of Directors. As well, the Board is authorized to appoint up to one-third additional Directors to hold office until not later than the next annual meeting of Shareholders.

3)Appointment of Auditor

The Auditor is to be appointed to serve until the close of the next annual meeting of Shareholders, and the Directors are to be authorized to fix the Auditor’s remuneration.

The Board of Directors and management of the Company, on the advice of the Audit Committee of the Board, recommend that PricewaterhouseCoopers LLP, Vancouver, Canada, be appointed as Auditor, at a remuneration to be fixed by the Board of Directors.

4)Advisory Resolution on our Approach to Executive Compensation (Say on Pay)

Shareholders will be asked to consider and, if deemed advisable, to approve (on an advisory basis), by way of ordinary resolution, the Company’s approach to executive compensation.

5) Reconfirmation of the Rights Plan

At the Meeting, Shareholders will be asked to consider and, if deemed advisable reconfirm and approve, by way of ordinary resolution, amendment, restatement and continuation of the Rights Plan. The Company adopted the Rights Plan effective April 9, 2020 and it was ratified and approved by the Shareholders at the annual general meeting held on May 26, 2020. The Rights Plan has a term of nine years, subject to approval of its continuance by the Shareholders of the Company at the annual meetings of the Company in 2023 and 2026. Failing reconfirmation as required under the Rights Plan, the Rights Plan and all outstanding Rights thereunder will terminate at the conclusion of the Meeting.

The Rights Plan is an arrangement that gives holders of Common shares, other than a person that acquires above a specified threshold (20% or more) of the Common shares, the right to acquire additional Common shares at a discounted price in certain circumstances as described herein. The Rights Plan encourages the fair treatment of our Shareholders in connection with a take-over bid and protects against “creeping bids” (the accumulation of more than 20% of the Company’s Common shares through purchases exempt from the formal take-over bid rules).

Page 39 of the Circular, under the heading “Resolution to Reconfirm the Shareholder Rights Plan” provides detailed information regarding the Rights Plan.

INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTORS

The following table sets out the name of each person nominated by management for election as a Director, as well as the date that person first became a Director, their age, residence, position in the Company, independence status, principal occupation, background, experience, committee memberships, attendance records and their voting results at the last annual meeting of Shareholders. Additional information concerning compensation and security holdings of such persons is provided elsewhere in the Circular, including in “Direct and Indirect Share and Other Holdings of Current and Proposed Directors.” All of our Directors elected at our last annual meeting of Shareholders are standing for re-election, with the exception of Robert Phillips who is retiring from the Board. Doyle Beneby has been nominated in his place.

Unless otherwise indicated, each nominee has held the same or similar principal occupation with the organization set out below, or a predecessor of that organization, for the last five years. The information as to principal occupation and securities beneficially owned or controlled by each nominee has been furnished by the nominee and is not within the knowledge of our management.

HENRY H. (HANK)<br> <br>KETCHAM<br><br><br><br> <br><br><br><br><br><br> <br><br> <br>Director since September 16,<br><br><br>1985<br> <br><br><br><br>Age: 73<br> <br><br><br><br>Place of Residence:<br> <br>Vancouver,<br>B.C., Canada<br> <br><br> <br>Independent	Hank Ketcham is the Chair<br>of the Board. Mr. Ketcham was our President until April 2012 and retired from the position of CEO effective March 1, 2013 when his title as Chair of our Board was re-designated as Executive Chair.<br>Effective April 19, 2016, he became our Chair of the Board. He is also a director and minority shareholder of Ketcham Investments, Inc., which owns 3,912,718 Common shares and 1,743,228 Class B Shares of the Company. See “Voting<br>Securities and Principal Shareholders” for a description of such shareholdings. Mr. Ketcham has been actively involved with the Company since 1973. He was formerly a director of The Toronto-Dominion Bank.<br><br><br><br> <br>Key Areas of Expertise and Experience:
	Strategic Leadership<br><br><br>Senior Executive<br><br><br>Industry Experience		Geographic Expertise<br><br><br>Government & Stakeholder Relations
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	78,478,566	2,340,859	97.10
Current Other Public Board Memberships<br><br><br><br> <br>None<br><br><br><br> <br>Past Public Board Memberships (2018 – 2022)<br><br><br><br> <br>None<br><br><br><br> <br>Securities held and total market value as at the<br>Record Date:
Shares^1^	395,896
---	---
Options	Nil
DS Units	2,029
Total market value of securities	$40,787,313
Meets share ownership<br>target	Yes
1. Includes Common<br>shares and Class B shares.

DOYLE BENEBY<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>New nominee<br><br><br><br> <br>Age: 63<br><br><br><br> <br>Place of Residence: West Palm<br><br><br>Beach, Florida, USA<br> <br><br><br><br>Independent	Doyle Beneby is a<br>Corporate Director. From November 2018 to October 2022, he served as Chief Executive Officer of Midland Cogeneration Venture. Prior to that, he had been self-employed as a Corporate Director since May 2016. He was formerly the CEO of New Generation<br>Power International, an international independent renewable energy company, from October 2015 to May 2016. Prior to joining New Generation Power International, he was the President and CEO of CPS Energy, the largest municipally-owned gas and<br>electric utility in the US, a position he held since August 2010. Mr. Beneby has over 35 years’ experience in various aspects of the electrical power industry. Prior to joining CPS Energy, Mr. Beneby served at Exelon Corporation from<br>2003 to 2010 in various roles, most recently, as Senior Vice-President of Exelon Power and President of Exelon Corporation from 2009 to 2010. From 2008 to 2009, he served as Vice-President, Generation Operations for Exelon Corporation, and prior to<br>that and from 2005 to 2008, he served as Vice-President, Electric Operations for PECO, a subsidiary of Exelon Corporation. Mr. Beneby holds a Master of Business Administration from the University of Miami, and a Bachelor of Science from Montana<br>Technical College. In 2021, Mr. Beneby was recognized as one of the Most Influential Black Corporate Directors by Savoy Magazine.<br> <br><br><br><br>Key Areas of Expertise and Experience:
	Strategic Leadership<br><br><br>Senior Executive<br><br><br>Human Resources & Compensation		Geographic Expertise<br><br><br>Environment, Health & Safety<br><br><br>Risk Management
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	n/a	n/a
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	n/a	n/a	n/a
Current Other Public Board Memberships<br><br><br><br> <br>Capital Power<br>Corporation Korn Ferry International<br><br><br>Quanta Services<br> <br><br><br><br>Past Public Board Memberships (2018 – 2022)<br> <br><br><br><br>None<br> <br><br><br><br>Securities held and total market value as at the Record Date:
Shares	0
---	---
DS Units	n/a
Total market value of securities	NIL
Meets share ownership target^1^	n/a
1. If elected at the Meeting, Mr. Beneby will be permitted to meet the minimum<br>shareholding requirement within five years of his appointment.

REID E. CARTER<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Director since April 19,<br>2016<br> <br><br> <br>Age: 66<br><br><br><br> <br>Place of Residence: West<br><br><br>Vancouver, B.C., Canada<br> <br><br><br><br>Independent	Reid E. Carter is a Corporate Director. From 2003 to the end of 2018, Mr. Carter was a Managing Partner at Brookfield Asset Management,<br>Inc., a global asset manager, and was President of Brookfield Timberlands Management LP. In this role, Mr. Carter led the acquisition of approximately 3.5 million acres of private timberlands throughout North America and Brazil as well as<br>the teams responsible for all growth and operations aspects of these businesses. From 2010 to 2015, Mr. Carter also served as President and Chief Executive Officer, and until May 2021 as a director, of Acadian Timber Corp. and, from 2006 to<br>2010, as President and Chief Executive Officer of its predecessor, Acadian Timber Income Fund, which is listed on the TSX. He served as National Bank Financial’s Paper and Forest Products Analyst between 1996 and 2003. Between 1990 and 1996 he<br>served as a resource analyst with TimberWest Forest Corp. Mr. Carter served as a director of Enercare Inc. until the end of 2019. Mr. Carter holds a combined undergraduate degree in Forestry and Biology and a master’s degree in Forest<br>Soils, both from the University of British Columbia. Mr. Carter is the Chair of the Audit Committee and a member of the Governance & Nominating Committee.<br><br><br><br> <br>Key Areas of Expertise and Experience:
	Senior Executive<br><br><br>Financial Literacy<br><br><br>Industry Experience		Geographic Expertise<br><br><br>Technology
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Audit	4 of 4	100
	Governance & Nominating	4 of 4	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	79,297,284	1,522,141	98.12
Current Other Public Board Memberships:<br><br><br><br> <br>None<br><br><br><br> <br>Past Public Board Memberships (2018 – 2022):<br><br><br><br> <br>Enercare Inc.<br> <br> Acadian Timber Corp.<br> <br><br> <br>Securities held and total<br>market value as at the Record Date:
Shares	3,000
---	---
DS Units	12,956
Total market value of securities	$1,635,490
Meets share ownership<br>target	Yes

RAYMOND FERRIS<br> <br><br> <br><br><br><br><br><br> <br><br> <br>Director since April 23,<br>2019<br> <br><br> <br>Age: 60<br><br><br><br> <br>Place of Residence:<br><br><br>Vancouver, B.C., Canada<br> <br><br><br><br>Non-Independent	Ray Ferris is our<br>President and CEO. Before April 19, 2018, Mr. Ferris was our Executive Vice-President and Chief Operating Officer, and before February 15, 2016 he was our Vice-President, Wood Products. On April 19, 2018 the Company announced a<br>senior leadership transition plan and Mr. Ferris replaced Mr. Seraphim as President of the Company, and on June 30, 2019, Mr. Ferris replaced Mr. Seraphim as CEO following Mr. Seraphim’s retirement from that<br>office. Mr. Ferris is the board chair of the Forest Products Association of Canada. Mr. Ferris holds a Bachelor of Science Degree in Engineering from the University of New Brunswick.<br><br><br><br> <br>Key Areas of Expertise and Experience:
	Strategic Leadership<br><br><br>Senior Executive<br><br><br>Industry Experience		Geographic Expertise<br><br><br>Environment, Health & Safety
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	80,091,124	728,301	99.10
Current Other Public Board Memberships:<br><br><br><br> <br>None<br><br><br><br> <br>Past Public Board Memberships (2018 – 2022):<br><br><br><br> <br>None<br><br><br><br> <br>Securities held and total market value as at the Record<br>Date:
Shares	39,452
---	---
Options	225,943
DS Units	Nil
PS Units	56,629
Total market value of securities	$4,043,830^1^
Meets share ownership<br>target	Yes
1. Mr. Ferris also holds Options and Units as described in the Summary Compensation Table and under<br>the heading Summary of Outstanding Options and the heading RS Units and PS Units.

JOHN N. FLOREN<br> <br><br> <br><br><br><br><br><br> <br><br> <br>Director since April 19,<br>2016<br> <br><br> <br>Age: 64<br><br><br><br> <br>Place of Residence: Oakville,<br><br><br>Ontario, Canada<br> <br><br><br><br>Independent	John N. Floren is<br>recently retired as the President and Chief Executive Officer of Methanex Corporation. Prior, Mr. Floren was Senior Vice-President, Global Marketing and Logistics of Methanex from June 2005 and, prior to that, Director, Marketing and Logistics,<br>North America from May 2002. He was an employee of Methanex for approximately 23 years and has worked in the chemical industry for over 35 years. Mr. Floren holds a Bachelor of Arts in Economics from the University of Manitoba. He also attended<br>the Harvard Business School’s Program for Management Development and has attended the International Executive Program at INSEAD. He also completed the Directors Education Program at the Institute of Corporate Directors. Mr. Floren is the<br>Chair of the Health, Safety & Environment Committee and a member of the Human Resources & Compensation Committee and the Governance & Nominating Committee.<br><br><br><br> <br>Key Areas of Expertise and Experience:
	Strategic Leadership<br><br><br>Senior Executive<br><br><br>Risk Management		Environment, Health & Safety<br><br><br>Sustainability, Climate Change &<br> <br>Social<br>Responsibility
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Human Resources &<br>Compensation	3 of 3	100
	Health, Safety &<br>Environment	3 of 3	100
	Governance & Nominating	4 of 4	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	79,998,381	821,044	98.98
Current Other Public Board Memberships:<br><br><br><br> <br>None<br><br><br><br> <br>Past Public Board Memberships (2018 – 2022):<br><br><br><br> <br>Methanex Corporation<br><br><br><br> <br>Securities held and total market value as at the Record<br>Date:
Shares	Nil
---	---
DS Units	8,078
Total market value of securities	$827,995
Meets share ownership<br>target	Yes

ELLIS KETCHAM JOHNSON<br> <br><br> <br><br><br><br><br><br> <br><br> <br>Director since April 20,<br>2021<br> <br><br> <br>Age: 59<br><br><br><br> <br>Place of Residence:<br><br><br>Greenwich, Connecticut, USA<br> <br><br><br><br>Independent	Ellis Ketcham Johnson is<br>currently the President of a private philanthropic foundation and a member of the Parents Leadership Council of Georgetown University. She previously worked at Imax Corporation in Canada. Ms. Johnson completed her undergraduate degree at Lewis<br>and Clark College and received a graduate degree from Yale University. She recently completed a Directorship Program with an emphasis on Board Governance. Ms. Johnson is a member of the Audit Committee and the Health, Safety &<br>Environment Committee.<br> <br><br> <br>Key Areas of Expertise and<br>Experience:
	Government & Stakeholder Relations<br><br><br>Human Resources & Compensation<br><br><br>Environment, Health & Safety		Sustainability, Climate Change &<br><br><br>Social Responsibility<br><br><br>Financial Literacy
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Audit	3 of 3	100
	Health, Safety &<br>Environment	3 of 3	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	80,616,788	202,637	99.75
Current Other Public Board Memberships:<br><br><br><br> <br>None<br><br><br><br> <br>Past Public Board Memberships (2018 – 2022):<br><br><br><br> <br>None<br><br><br><br> <br>Securities held and total market value as at the Record<br>Date:
Shares	1,004,990
---	---
DS Units	Nil
Total market value of securities	$103,011,475
Meets share ownership<br>target	Yes

BRIAN G. KENNING<br> <br><br> <br><br><br><br><br><br> <br><br> <br>Director since<br>April 19, 2017<br> <br><br> <br>Age: 73<br><br><br><br> <br>Place of Residence:<br><br><br>Vancouver, B.C., Canada<br> <br><br><br><br>Independent	Brian G. Kenning is a<br>Corporate Director. He was a Managing Partner of Brookfield Asset Management Inc., a company involved in the real estate, asset management and power generation sectors, from 1995 to 2005. From 1988 to 2005, Mr. Kenning was also Chairman and<br>Managing Partner of B.C. Pacific Capital Corporation, an affiliate of Brookfield Asset Management Inc., active in merchant banking and investing. Over the past 10 years, Mr. Kenning has served as director of a number of public and private<br>corporations. He served as a director of British Columbia Ferry Services Inc. until May 2019, and as a director of Maxar Technologies Ltd. from 2003 to 2019. In addition, Mr. Kenning is a past Governor of the B.C. Business Council and a past<br>Director of the B.C. chapter of the Institute of Corporate Directors. Mr. Kenning graduated from Queen’s University with an MBA in 1973. Mr. Kenning is the Chair of the Human Resources & Compensation Committee and a member of<br>the Governance & Nominating Committee.<br> <br><br> <br>Key<br>Areas of Expertise and Experience:
	Financial Literacy<br><br><br>Risk Management<br><br><br>Capital Markets		Human Resources & Compensation<br><br><br>Board Experience
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Human Resources &<br>Compensation	3 of 3	100
	Governance & Nominating	4 of 4	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	79,275,043	1,544,382	98.09
Current Other Public Board Memberships<br><br><br><br> <br>None<br><br><br><br> <br>Past Public Board Memberships (2018 – 2022)<br><br><br><br> <br>Maxar Technologies Ltd.<br><br><br><br> <br>Securities held and total market value as at the Record<br>Date:
Shares	1,200
---	---
DS Units	7,317
Total market value of securities	$872,993
Meets share ownership<br>target	Yes

MARIAN LAWSON<br> <br><br> <br><br><br><br><br><br> <br><br> <br>Director since February<br>1, 2021<br> <br><br> <br>Age: 67<br><br><br><br> <br>Place of Residence: Toronto,<br><br><br>Ontario, Canada<br> <br><br><br><br>Independent	Marian Lawson retired from Scotiabank in 2018, with over 30 years of experience in banking and capital markets. Ms. Lawson served as a director<br>of Norbord from May 6, 2020 until her resignation and was appointed to the Board of West Fraser on February 1, 2021 in connection with the Norbord Acquisition. During her tenure, Ms. Lawson held numerous senior roles at Scotiabank including<br>Executive Vice-President, Global Head, Financial Institutions and Transaction Banking, Deputy Head of Corporate Banking, Managing Director, Capital Markets, and Vice-President, Internal Audit. The majority of her roles involved assisting management<br>teams in the execution of their strategies, which included acquisitions, expansions, divestitures, refinancings and restructurings. In addition, during the latter part of her career, Ms. Lawson successfully expanded and restructured several<br>businesses. In 2016, Ms. Lawson received the Women in Capital Markets Award for Leadership and the Women’s Executive Network, Top 100 Corporate Executive Award. Ms. Lawson holds a BA in Economics from York University, an MBA (Finance) from<br>McMaster University, and an ICD.D designation. Ms. Lawson is a director of Canadian Tire Bank (2018 to present) and was a board member of 1832 Asset Management LP, a wealth management subsidiary of Scotiabank, from 2016 to 2018. Ms. Lawson is a<br>member of the Human Resources & Compensation Committee and the Health, Safety & Environment Committee.<br> <br><br><br><br>Key Areas of Expertise and Experience:
	Strategic Leadership<br><br><br>Financial Literacy<br><br><br>Risk Management	Capital Markets<br><br><br>Board Experience<br> <br>Human Resources & Compensation
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Human Resources &<br>Compensation	3 of 3	100
	Health, Safety &<br>Environment	3 of 3	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	80,393,123	426,302	99.47
Current Other Public Board Memberships<br><br><br><br> <br>None<br><br><br><br> <br>Past Public Board Memberships (2018 – 2022)<br><br><br><br> <br>Norbord Inc.<br><br><br><br> <br>Securities held and total market value as at the Record<br>Date: ****
Shares	Nil
---	---
DS Units	5,260
Total market value of securities	$539,150
Meets share ownership<br>target	No^1^
1. Ms. Lawson was appointed to the Board on February 1, 2021 on completion of the Norbord<br>Acquisition and is permitted to meet the minimum shareholding requirement within five years of her appointment.

COLLEEN M.<br> <br>MCMORROW<br><br><br><br> <br><br><br><br><br><br> <br><br> <br>Director since February<br>1, 2021<br> <br><br> <br>Age: 66<br><br><br><br> <br>Place of Residence: Oakville,<br><br><br>Ontario, Canada<br> <br><br><br><br>Independent	Colleen M. McMorrow earned a Bachelor of Commerce Degree and a Graduate Diploma in Accountancy, both from the John Molson School of Business,<br>Concordia University. She is a Fellow Certified Public Accountant, Fellow Chartered Accountant and is currently a corporate Director. Ms. McMorrow served as a director of Norbord from May 6, 2020 until her resignation and was appointed to the Board<br>of West Fraser on February 1, 2021 in connection with the Norbord Acquisition. Ms. McMorrow was also a senior client assurance partner with Ernst & Young LLP (EY), a global professional services firm, until her retirement in June 2016. She has<br>more than 35 years of experience in advising audit committees and senior management of public and private global companies. In addition to her client serving role, Ms. McMorrow held a number of leadership roles at EY and, from 2009 to 2016, she was<br>the National Director in Canada of EY’s signature Entrepreneur of the Year awards program and the firm’s Growth Markets Leader (high-growth entrepreneurial companies). She is currently a director of Ether Capital Corporation, whose common<br>shares are listed for trading on the Aequitas NEO Exchange, and Exco Technologies Limited, which is listed on the TSX (see “Our Corporate Governance Policies and Procedures – Serving on Other Boards”). Ms. McMorrow was formerly a<br>director of LOGIQ Asset Management from April 2017 until it was acquired in June 2018. She has also been a member of the board of the Investment Management Corporation of Ontario since 2016 and of Plan International Canada Inc. since 2015. Ms.<br>McMorrow is a member of the Audit Committee and the Health, Safety & Environment Committee.<br> <br><br><br><br>Key Areas of Expertise and Experience:
	Financial Literacy<br><br><br>Risk Management<br><br><br>Board Experience	Human Resources & Compensation<br><br><br>Technology
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Audit	4 of 4	100
	Health, Safety &<br>Environment	3 of 3	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	80,563,237	256,187	99.68
Current Other Public Board Memberships<br><br><br><br> <br>Ether Capital<br>Corporation <br> Exco Technologies Limited.<br> <br><br> <br>Past Public Board<br>Memberships (2018 – 2022)<br> <br><br> <br>Norbord<br>Inc. <br> Logiq Asset Management Inc.<br><br><br><br> <br>Securities held and total market value as at the Record<br>Date: ****
Shares	Nil
---	---
DS Units	4,614
Total market value of securities	$472,935
Meets share ownership<br>target	No^1^
1. Ms. McMorrow was appointed to the Board on February 1, 2021 on completion of the<br>Norbord Acquisition and is permitted to meet the minimum shareholding requirement within five years of her appointment.

JANICE G. RENNIE<br> <br><br> <br><br><br><br><br><br> <br><br> <br>Director since April<br>28, 2004<br> <br><br> <br>Age: 65<br><br><br><br> <br>Place of Residence:<br><br><br>Edmonton, Alberta, Canada<br> <br><br><br><br>Independent	Janice G. Rennie who holds a Bachelor of Commerce, is a Chartered Professional Accountant, Chartered Accountant. She was elected as a Fellow of<br>the Chartered Accountants in 1998. Ms. Rennie has chaired or been a member of several audit committees of public companies in the past and currently is chair of the audit committee of Major Drilling Group International Inc. From September 7, 2004 to<br>September 9, 2005, she was the Senior Vice-President, Human Resources and Organizational Effectiveness of EPCOR Utilities Inc., a provider of energy, water and energy-related services and products that is solely owned by the City of Edmonton, on<br>whose board she previously served for over 10 years and rejoined as a director in 2017 and currently serves as the Chair of its board. She currently serves as a director of Major Drilling Group International Inc., which is listed on the TSX (see<br>“Our Corporate Governance Policies and Procedures – Serving on Other Boards”). Ms. Rennie was formerly a director of Methanex Corporation, Teck Resources Ltd. and WestJet Airlines Ltd. Ms. Rennie earned a Bachelor of Commerce Degree<br>from the University of Alberta. Ms. Rennie is also the former Chair of the Provincial Audit Committee of Alberta. In recognition of her career achievements, in 2022, Ms. Rennie was also recognized by CPA Alberta with the Lifetime Achievement Award.<br>Ms. Rennie is a member of the Audit Committee, the Human Resources & Compensation Committee and the Governance & Nominating Committee.<br> <br><br><br><br>Key Areas of Expertise and Experience:
	Financial Literacy<br><br><br>Capital Markets<br><br><br>Human Resources & Compensation	Board Experience<br><br><br>Sustainability, Climate Change & Social<br><br><br>Responsibility
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Audit	4 of 4	100
	Human Resources &<br>Compensation	3 of 3	100
	Governance & Nominating	4 of 4	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	76,064,521	4,754,904	94.12
Current Other Public Board Memberships<br><br><br><br> <br>Major Drilling Group International<br>Inc. EPCOR Utilities Inc.<br> <br><br><br><br>Past Public Board Memberships (2018 – 2022)<br> <br><br><br><br>Methanex<br>Corporation <br> WestJet Airlines Ltd.<br> <br><br><br><br>Securities held and total market value as at the Record Date: ****
Shares	1,000
---	---
DS Units	21,029
Total market value of securities	$2,257,973
Meets share ownership<br>target	Yes

GILLIAN D. WINCKLER<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Director since April<br>19, 2017<br> <br><br> <br>Age: 60<br><br><br><br> <br>Place of Residence:<br><br><br>Vancouver, B.C., Canada<br> <br><br><br><br>Independent	Gillian D. Winckler is a former mining and business executive with over 25 years of diversified experience in the metals and mining industry<br>and the financial sector. Ms. Winckler spent 16 years with BHP Billiton in London, England and Vancouver, Canada where she was involved with corporate and divisional strategy, mergers and acquisitions, divestments, exploration as well as project<br>evaluation and development. Upon leaving the company she joined Coalspur Limited, a thermal coal development company listed in Canada and Australia, as its Chief Executive Officer and President. Ms. Winckler held this position, as well as Chief<br>Financial Officer for a brief period of three years until the company was acquired in June 2015. Prior to the mining industry, Ms. Winckler spent five years as a corporate financier in South Africa and London and five years in the auditing<br>profession. Ms. Winckler is a Chartered Accountant (South Africa), with a B.Sc. and B.Commerce (Honours) obtained in South Africa. Ms. Winckler also obtained an ESG Competent Boards Certificate and Global Competent Boards Designation (GCB.D). Ms.<br>Winckler currently is the Chair of the Board of Directors of Pan American Silver Corp., which is listed on the TSX and The NASDAQ Stock Market, and a director of FLSmidth & Co. A/S, a Danish engineering company, which is listed on The NASDAQ OMX<br>Exchange Copenhagen. Ms. Winckler is a member of the Audit Committee and the Health, Safety & Environment Committee.<br> <br><br><br><br>Key Areas of Expertise and Experience:
	Senior Executive<br><br><br>Financial Literacy<br><br><br>Geographic Expertise	Environment, Health & Safety<br><br><br>Sustainability, Climate Change &<br> <br>Social<br>Responsibility
	Board and Committee memberships and attendance record<br>in 2022:
		Attendance	% Overall
	Board	11 of 11	100
	Audit	3 of 4	75
	Health, Safety &<br>Environment	3 of 3	100
	Voting results of 2022 annual meeting of<br>Shareholders:
	Votes for	Votes withheld	% Votes For
---	---	---	---
Number of votes	80,522,389	297,036	99.63
Current Other Public Board Memberships<br><br><br><br> <br>Pan American Silver<br>Corp. FLSmidth & Co.<br> <br><br><br><br>Past Public Board Memberships (2018 – 2022)<br> <br><br><br><br>None<br> <br><br><br><br>Securities held and total market value as at the Record Date: ****
Shares	1,750
---	---
DS Units	8,596
Total market value of securities	$1,060,465
Meets share ownership<br>target	Yes

Each nominee has consented to act as a Director if elected. We do not contemplate that any proposed nominee will be unable to serve as a Director, but if for any reason that occurs before the Meeting, the

persons named in the enclosed form of proxy reserve the right to vote for another nominee at their discretion.

Board Renewal

The Board recognizes the need for, and benefits of, introducing new and diverse characteristics and perspectives at the Board level, and it also understands the importance of having continuity of institutional and industry knowledge and experience. Our Board renewal process is designed to achieve and maintain a balance between those considerations.

The Governance Committee is responsible for identifying new candidates to stand as nominees for election or appointment as Directors to our Board. In identifying potential Director candidates, the Governance Committee takes into account a broad variety of factors it considers appropriate, including skills, independence, financial acumen, Board dynamics and personal characteristics. In addition, the Governance Committee considers diversity in perspective arising from personal, professional or other attributes and experiences when identifying potential Director candidates. Desirable individual characteristics of nominees include integrity, credibility, the ability to generate public confidence and maintain the goodwill and confidence of our Shareholders, sound and independent business judgment, general good health and the capability and willingness to travel to, attend and contribute at Board functions on a regular basis. Background checks, as appropriate, are completed prior to nomination.

In 2015, the Governance Committee implemented the first phase of the Board renewal process by searching for and identifying two suitable candidates for nomination as Directors. As part of this process, the Governance Committee engaged an outside search firm and also sought input and advice from current Directors and our executive management. The major criteria adopted by the Governance Committee for candidates were: (a) chief executive officer experience; (b) experience in a cyclical, capital-intensive industry; (c) strong strategic thinker; and (d) representing diverse background and experience.

As a result of this process, in 2016, Reid Carter and John Floren were identified as nominees to the Board and they were elected as Directors at the 2016 annual meeting of Shareholders.

In 2016, the Governance Committee implemented the second phase of the Board renewal process through continuing efforts to search for and identify additional suitable candidates. As a result, the Governance Committee identified Brian Kenning and Gillian Winckler as important additions to the Board and they were elected as Directors at the 2017 annual meeting of Shareholders. Additionally, as part of the second phase of this process, Clark Binkley, Duncan Gibson and Harald Ludwig retired and did not stand for re-election as Directors.

The Governance Committee continues to focus on diversity and inclusion and to accelerate diverse representation on our Board, management and talent across the organization. In connection with the Norbord Acquisition, two independent directors of Norbord, being Marian Lawson and Colleen McMorrow, were added to the Board in 2021.

Further at the conclusion of the 2021 annual shareholders meeting, John Ketcham retired from our Board after serving for six years. Ellis Ketcham Johnson was nominated by management for election as a Director and was elected to the Board at the Company’s annual general meeting held April 20, 2021.

At the conclusion of the April 20, 2022 annual and special meeting, Gerry Miller retired from the Board and at the upcoming Meeting, Robert Phillips will be retiring from the Board.

To further enhance the Board renewal process, the Company has implemented a robust performance review process and employs a skills matrix to identify skills or experience gaps, which is updated and reviewed based on the advice and recommendation of the Governance Committee.

As a result of the Governance Committee review process and Mr. Phillips upcoming retirement from the Board at the Meeting, the Company engaged an outside search firm and also sought input and advice from current Directors and our executive management to identify a suitable candidate for nomination to the Board. The Company has nominated Doyle Beneby to stand for election at the upcoming Meeting.

Performance Reviews

The Governance Committee regularly, and not less frequently than annually, reviews the performance of the Board and its Committees. This review has been conducted by way of formal questionnaire and report and by informal interviews and discussions led by the Chair. The Board performance review also includes a “peer” or individual Director review process. To date, no significant problem with respect to performance of the Board, any Committee or any individual Director has been identified.

Skills Matrix

The Governance Committee uses a skills matrix to assist in the process of identifying suitable additions to the Board. The Governance Committee reviews a matrix that sets out the various skills and experience considered to be desirable for the Board to possess in the context of the Company’s strategic direction. The Governance Committee then assesses the skills and experience of each current Board member against this matrix. When completed, the matrix helps the Governance Committee identify any skills or experience gaps and provides the basis for a search to be conducted for new Directors to fill any gaps.

In February 2022, on the recommendation of the Governance Committee, the Board adopted changes to the skills matrix to align with the Company’s strategic direction and the skills and experience desirable for the Board. The Board believes the revised skills matrix is better aligned to meet the current skills and experience for the Board as a dual-listed TSX and NYSE company and the expectations of its Shareholders.

The following skills matrix sets out the skills or experience that the Governance Committee has targeted for Directors.

	Target Number
STRATEGIC LEADERSHIP
Experience in strategic management, planning and development, or leading organic or acquisition<br><br><br>growth.	5
SENIOR EXECUTIVE
Experience as CEO or senior executive officer of a public company or a major private corporation.	4
FINANCIAL LITERACY
Executive or professional experience in public company financial accounting and reporting with knowledge of internal<br>financial controls.	4
INDUSTRY EXPERIENCE
Senior executive experience in the forest products industry or related industries including building products or home<br>building, or with other significant manufacturing operations, including upstream and downstream supply chain and logistics.	3

	Target Number
GEOGRAPHIC EXPERTISE
Executive, management or other significant experience in organizations with international operations including in those<br>countries in which West Fraser operates.	4
RISK MANAGEMENT
Experience identifying, assessing, managing and reporting on corporate risks, including experience with risk management<br>systems.	4
CAPITAL MARKETS
Experience in corporate finance with knowledge of debt and equity markets or experience in investment banking or mergers<br>and acquisitions.	4
GOVERNMENT AND STAKEHOLDER RELATIONS
Experience in, or strong understanding of, public policy related to the forest products industry including community,<br>first nations and shareholder relations.	2
HUMAN RESOURCES AND COMPENSATION
Experience managing or overseeing compensation, benefits and pension programs and executive compensation.	4
Experience with developing or assessing succession planning, talent development and retention.	4
BOARD EXPERIENCE
Prior or current experience as a board member of a major organization (public or private) other than West Fraser.	5
ENVIRONMENT, HEALTH AND SAFETY
Experience in workplace health and safety practices and protection of the environment, including the requirement for a<br>strong safety culture.	4
SUSTAINABILITY, CLIMATE CHANGE AND SOCIAL RESPONSIBILITY
Experience in or with sustainability, climate change, diversity, equity and inclusion and social responsibility<br>programs.	4
TECHNOLOGY
Experience with technology programs and systems, including emerging technologies, information technology systems and/or<br>cybersecurity.	2

The key skills and experience of each Director are also set out in the table under the heading “Information Regarding Nominees for Election as Directors”. The Board is of the view that the minimum target levels have been achieved by the current Board and will be achieved assuming all nominees described above are elected at the Meeting.

Board Tenure

The Company does not have term limits for its Directors, as the Board is of the view that term limits are arbitrary and can result in the removal or exclusion of valuable and experienced Directors solely because of length of service. For similar reasons, in September 2016, the Board considered the continued use of an age limitation for Directors and determined that its continuation was no longer appropriate nor in the best interests of the Company. The Board believes that arbitrary age or term limits can be detrimental to the Company by excluding experienced and valuable candidates with the accompanying loss of continuity and institutional knowledge. Such belief is consistent with the positions of a number of governance and advisory groups.

The decision to not have term limits and to eliminate the age limitation was based upon the Board’s belief that Directors should be assessed on their ability to make meaningful contributions. The Company undertakes regular and rigorous reviews of Board, Committee and Director performance and skills as part of evaluating the overall performance of the Board, Committees and the contributions made by each Director. The Company’s annual performance review and skills assessment is a more meaningful way to evaluate and assess Director performance, and a more effective way to maintain an appropriate balance between the benefits of new and diverse characteristics and perspectives and ensuring there is continuity of institutional and industry knowledge and experience. The Board has demonstrated the effectiveness of its approach.

Over the past seven years, the Company identified and added seven new Board members and five of its long-term serving Board members retired, in addition to Ted Seraphim who retired as our CEO and as a Director in 2019 and Ray Ferris who was appointed our CEO and a Director on Ted’s retirement. The Board is composed of members with an appropriate mix of Directors who are new to the Company, and who bring fresh perspectives, including those with institutional knowledge and experience. With the conclusion of the Meeting, Robert Phillips will also be retiring from the Board.

The following table shows the tenure of the Directors standing for election at the Meeting (and assumes all proposed Director nominee candidates are elected):

Board Tenure
Tenure	Number of Directors	% of Directors^1^
0 to 1 years	1	9.1
2 to 5 years	4	36.4
6 to 10 years	4	36.4
11 years and over	2	18.2

Note:

1.	Totals may not add due to rounding.

Upon election, these Directors will have an average tenure of approximately 8.7years.

Director Compensation

The HR&C Committee regularly reviews our Director compensation policy and, following a review in December 2018 and October 2021 of director compensation programs of our peers, approved a number of changes to Director compensation. The Board adopted a fixed fee Director compensation structure, which, effective October 1, 2021, consists of the following:

Director Compensation Structure
Retainer	Fee
Annual base retainer	$90,000^1^
Annual equity retainer	$110,000 in DS Units
Annual Committee Chair retainer^2^	$20,000 per Committee
Chair annual retainer^3^	$200,000

Notes:

1.	Each Director may elect once each year that up to 100% of the annual base retainer and other retainers be<br>paid in DS Units.
2.	For each Chair of the Audit Committee, Governance Committee, Health, Safety & Environment Committee<br>and the HR&C Committee.
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3.	Exclusive of annual base and equity retainers.
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Directors are not paid separate meeting fees or fees for Committee membership and are not provided a travel allowance. The HR&C Committee believes that this compensation structure is consistent with current governance best practices and emphasizes that the role of a corporate Director is not confined to

attendance and participation at meetings. Directors are reimbursed for out-of-pocket expenses incurred in attending meetings of the Board or Committee meetings or otherwise on Company business.

Under our Equity Holding Requirements Policy, the minimum shareholding requirement for each Director is a multiple of three times the aggregate of a Director’s annual base retainer and annual equity retainer, as described in further detail under the heading “Minimum Equity Holding”. If a Director’s equity ownership exceeds this threshold, that Director has the right to elect to receive cash in lieu of their annual equity retainer payable in DS Units.

The Company has DSU Plans which provides a structure for Directors to accumulate an equity-like holding in the Company. The DSU Plans allows Directors to participate in our growth by providing a deferred payment based on the value of a Common share at the time of redemption. Each Director may elect to receive up to 100% of their annual retainers in DS Units and must receive DS Units in payment of the annual equity retainer, unless the Director has achieved the minimum shareholding requirement and elected to receive cash in lieu of DS Units in payment of the annual equity retainer (see “Minimum Equity Holding”). The DS Units are issued based on the weighted average trading price of the Common shares on the TSX during the five trading days prior to their issue for DS Units issued prior to April 2022 and based on the volume weighted average trading price of the Common shares on the TSX on the trading day immediately prior to their issue for DS Units issued after April 2022. Additional DS Units are issued to take into account the value of dividends paid on Common shares from the date of issue to the date of redemption. DS Units are redeemable only after a Director retires, resigns or otherwise leaves the Board and has ceased to fulfill any other role as an officer or employee of the Company. A holder of DS Units may on redemption elect to redeem DS Units in cash or in Common shares, or a combination of cash and Common shares. The redemption value for each DS Unit a Director has elected to be redeemed in cash is the weighted average of the trading price on the TSX of a Common share over the last five trading days ending on the date of redemption for DS Units issued prior to April 2022 and is the weighted average trading price of the Common shares on the TSX on the trading day immediately before the date of redemption for DS Units issued after April 2022. DS Units qualify as equity for the purposes of the minimum equity holding requirement for Directors.

In addition, Ms. Lawson and Ms. McMorrow continue to hold Norbord DSUs, the number of which have been adjusted by the Exchange Ratio and are to be paid out in reference to Common shares, in accordance with the terms of the Norbord Acquisition. The Norbord DSUs operate in a similar fashion to the DS Units. See “Norbord RSU Plan and DSU Plans”.

The Company has a Directors’ Share Compensation Plan (the “Compensation Plan”), the purpose of which is to enable each Director to participate in our growth by receiving Common shares in lieu of cash for services performed as Directors. Under the Compensation Plan, Common shares are issued after each quarter at a price per share equal to the weighted average of the trading price for the Common shares on the TSX for the last five trading days in the quarter. The maximum number of Common shares that may be allotted for issuance under the Compensation Plan and the DSU Plan is 100,000. As at December 31, 2022, 87,993 DS Units were held by the Directors that could be redeemed for Common shares should a Director who retires, resigns or leaves the Board elect to redeem DS Units for Common shares instead of cash. No DS Units were redeemed for Common shares in 2022. DS Units issued after April 2022 may be redeemed for Common shares should a Director who retires, resigns or leaves the Board elect to redeem DS Units for Common shares instead of cash, but such Common shares will not be issued from treasury, but will be purchased on the open market.

Total Director Compensation

2022

Name	Feesearned^1^<br><br><br>($)	Share-basedawards^2^<br><br><br>($)	Option-basedawards($)	Non-equityincentive plancompensation($)	Pensionvalue($)	All othercompensation($)	Total($)
Hank Ketcham	290,000	110,000	Nil	Nil	Nil	Nil	400,000
Reid E. Carter	110,000	110,000	Nil	Nil	Nil	Nil	220,000
John N. Floren^3^	110,000	110,000	Nil	Nil	Nil	Nil	220,000
Ellis Ketcham Johnson^3^	90,000	110,000	Nil	Nil	Nil	Nil	200,000
Brian G. Kenning	110,000	110,000	Nil	Nil	Nil	Nil	220,000
Marian Lawson	90,000	110,000	Nil	Nil	Nil	Nil	200,000
Colleen M. McMorrow	90,000	110,000	Nil	Nil	Nil	Nil	200,000
Gerry Miller^4^	27,500	33,611	Nil	Nil	Nil	Nil	61,111
Robert L. Phillips^5^	119,167	110,000	Nil	Nil	Nil	Nil	229,167
Janice G. Rennie^3^	90,000	110,000	Nil	Nil	Nil	Nil	200,000
Gillian D. Winckler	90,000	110,000	Nil	Nil	Nil	Nil	200,000

Notes:

1.	The amount represents the total fees earned during 2022, other than the annual equity retainer which is<br>included in the Share-based awards column of this table. These amounts were paid either in cash or DS Units as described in the following chart.
2.	DS Units granted at the end of each quarter in payment of the annual equity retainer are valued based on the<br>volume weighted average trading price of the Common shares on the TSX on the trading day immediately before the end of the quarter.
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3.	Share-based awards were paid in cash to Mr. Floren, Ms Johnson and Ms. Rennie, rather than DS Units<br>given that each Director achieved the minimum equity holding requirement (see “Minimum Equity Holding”) and elected to receive cash.
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4.	Mr. Miller retired from the Board effective April 20, 2022.
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5.	Mr. Phillips is not standing for re-election at the Meeting.<br>
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Payment of 2022 Compensation

Name	Cash<br> <br>($)	DS Units^1^<br><br><br>($)
Hank Ketcham	290,000	110,000
Reid E. Carter	120,000	100,000
John N. Floren	220,000	Nil^4^
Ellis Ketcham Johnson	200,000	Nil^4^
Brian G. Kenning	110,000	110,000
Marian Lawson	Nil	200,000
Colleen M. McMorrow	Nil	200,000
Gerry Miller^2^	61,111	Nil^4^
Robert L. Phillips^3^	119,167	110,000
Janice G. Rennie	200,000	Nil^4^
Gillian D. Winckler	50,000	150,000

Notes:

1.	DS Units are granted quarterly based on the volume weighted average trading price of the Common shares on the<br>TSX on the trading day immediately before the end of the quarter.
2.	Mr. Miller retired from the Board effective April 20, 2022.
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3.	Mr. Phillips is not standing for re-election at the Meeting.<br>
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4.	This amount was paid in cash rather than DS Units given that the individual Director achieved the minimum equity<br>holding requirements (see “Minimum Equity Holding”) and elected to receive cash.
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Direct and Indirect Share and Other Holdings of Current and Proposed Directors

(as at the Record Date)

Name
Hank Ketcham^2^	395,896	2,029
Doyle Beneby^3^	Nil	Nil
Reid E. Carter	3,000	12,956
Ray Ferris^4^	39,452	Nil
John N. Floren	Nil	8,078
Ellis Ketcham Johnson	1,004,990	Nil
Brian G. Kenning	1,200	7,317
Marian Lawson^5^	Nil	5,260
Colleen McMorrow^5^	Nil	4,614
Robert L. Phillips^6^	11,000	18,473
Janice G. Rennie	1,000	21,029
Gillian D. Winckler	1,750	8,596

Notes:

1.	Includes Common shares and Class B Shares.
2.	Does not include 3,912,718 Common shares and 1,743,228 Class B Shares held by Ketcham Investments, Inc.<br>See “Voting Securities and Principal Shareholders” for a description of such shareholdings.
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3.	Mr. Beneby has been nominated for election at the Meeting.
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4.	Mr. Ferris also holds Options and PS Units as described in the Summary Compensation Table and under the<br>heading Summary of Outstanding Options and the heading RS Units and PS Units.
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5.	Ms. Lawson and Ms. McMorrow were appointed to the Board on February 1, 2021 on completion of<br>the Norbord Acquisition. The units in column for DS Units held by Ms. Lawson and Ms. McMorrow include Norbord DSUs, the number of which have been adjusted by the Exchange Ratio and will be paid out in reference to the value of Common<br>shares in accordance with the terms of the Norbord Acquisition. See “Norbord RSU Plan and DSU Plans”.
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6.	Mr. Phillips is not standing for re-election at the Meeting.<br>
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As at the Record Date, based on the closing price of the Common shares on the TSX (the “ClosingPrice”) of $102.50, the total value of all Shares, exercisable Options and DS Units held by each current Director is as follows:

Value of Shares and DS Units Held by Current and Proposed Directors

(as at the Record Date)

Name	Shares ($)	DS Units ($)	Total Value ($)
Hank Ketcham	40,579,340	207,973	40,787,313
Doyle Beneby^1^	Nil	Nil	Nil
Reid E. Carter	307,500	1,327,990	1,635,490
Ray Ferris^2^	4,043,830	Nil	4,043,830
John N. Floren	Nil	827,995	827,995
Brian G. Kenning	123,000	749,993	872,993
Ellis Ketcham Johnson	103,011,475	Nil	103,011,475
Marian Lawson^3^	Nil	539,150	539,150
Colleen McMorrow^3^	Nil	472,935	472,935
Robert L. Phillips^4^	1,127,500	1,893,483	3,020,983
Janice G. Rennie	102,500	2,155,473	2,257,973
Gillian D. Winckler	179,375	881,090	1,060,465

Notes:

1.	Mr. Beneby has been nominated for election at the Meeting.
2.	Mr. Ferris also holds Options and Units as described in the Summary Compensation Table and under the<br>heading Summary of Outstanding Options and the heading RS Units and PS Units.
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3.	Ms. Lawson and Ms. McMorrow were appointed to the Board on February 1, 2021 on completion of<br>the Norbord Acquisition. The units in the column for DS Units held by Ms. Lawson and Ms. McMorrow include Norbord DSUs, the number of which have been adjusted by the Exchange Ratio and will be paid out in reference to the value of Common<br>shares in accordance with the terms of the Norbord Acquisition. See “Norbord RSU Plan and DSU Plans”.
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4.	Mr. Phillips is not standing for re-election at the Meeting.<br>
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VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS

As of the Record Date, a total of 81,273,936 Common shares and 2,281,478 Class B Shares were issued, each carrying the right to one vote. Our Class B Shares are equal in all respects to our Common shares and are exchangeable on a one-for-one basis for Common shares. Our Common shares are listed for trading on the TSX and the NYSE, while our Class B Shares are not listed for trading. Certain circumstances or corporate transactions may require the approval of the holders of our Common shares and Class B Shares on a separate class-by-class basis.

The Directors have fixed the close of business on the Record Date for the Meeting, being the date for the determination of the Registered Shareholders entitled to receive notice of, and to vote at, the Meeting and any adjournment thereof.

To the knowledge of the Directors and the Named Executive Officers (as defined in this Circular under the heading “Executive Equity Holding Requirements”), the only persons who, as at the Record Date, beneficially own or control or direct, directly or indirectly, Shares carrying 10% or more of the voting rights attached to any class of our voting securities are as follows:

Name of Beneficial Holder	Title of Class	Amount Beneficially<br><br><br>Owned, Controlled or<br><br><br>Directed, Directly or<br><br><br>Indirectly	% of Class	% of Total Votes
Banasino Investments Limited	Common shares	8,346,494	10.3	10.0
James A. Pattison	Common shares	8,914,900^1^	11.0	10.7
Ketcham Investments, Inc.^2^	Common shares<br><br><br>Class B Shares	3,912,718<br><br><br>1,743,228	4.8<br> <br>76.4	4.7<br><br><br>2.1<br><br><br>6.8^3^
Tysa Investments, Inc.^3^	Common shares<br><br><br>Class B Shares	3,677,392<br><br><br>333,066	4.5<br> <br>14.6	4.4<br><br><br>0.4<br><br><br>4.8^3^

Notes:

1.	Includes indirect ownership of 8,914,900 Common shares held by Great Pacific Capital Corporation.<br>
2.	Ketcham Investments, Inc. is controlled by three separate families related to Hank Ketcham, our Chair. Hank<br>Ketcham’s immediate family owns an approximately 22% interest in Ketcham Investments, Inc. and Hank Ketcham is one of four directors on its board and has advised that he does not exercise independent control or direction over Ketcham<br>Investments, Inc. or the Shares of the Company owned by Ketcham Investments, Inc.
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3.	Tysa Investments, Inc. is controlled by William P. Ketcham, one of our former Directors.<br>
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Share Repurchases

On February 22, 2023, we commenced a normal course issuer bid (the “2023 NCIB”), allowing us to acquire an additional 4,063,696 Common shares for cancellation until the 2023 NCIB’s expiry on February 26, 2024. The 2023 NCIB represents approximately 5% of the Common shares issued and outstanding as at February 13, 2023. As at the Record Date, no Common shares have been purchased under the 2023 NCIB.

On February 23, 2022, we commenced a normal course issuer bid (the “2022 NCIB”), allowing us to acquire an additional 10,194,000 Common shares for cancellation until the 2022 NCIB’s expiry on February 22, 2023. The 2022 NCIB represents approximately 10% of the Common shares in the public float as at February 14, 2022. At expiry, 10,194,000 Common shares have been purchased under the 2022 NCIB.

On June 7, 2022, we completed a substantial issuer bid pursuant to which we purchased for cancellation a total of 11,898,205 Common shares at a price of US$95.00 per share for an aggregate purchase price of US$1.13 billion.

On August 20, 2021, we completed a substantial issuer bid pursuant to which we purchased for cancellation a total of 10,309,278 Common shares at a price of $97.00 (US$76.84) per Common share for an aggregate purchase price of CAD$1.0 billion.

Shareholders may obtain a copy of the notices filed with the TSX in relation to the 2023 NCIB, 2022 NCIB or the substantial issuer bids, free of charge, by contacting Robert B. Winslow, CFA, Director, Investor Relations & Corporate Development at (416) 777-4426 or by email at [email protected].

APPOINTMENTOF THE AUDITOR

Our current Auditor is PricewaterhouseCoopers LLP, Chartered Professional Accountants, of 700 – 250 Howe Street, Vancouver, B.C. PricewaterhouseCoopers LLP has been our Auditor for more than six years.

The Auditor is appointed by the Shareholders, performs its role as the Auditor of our annual financial statements on their behalf, and reports the results of the audit to them. In order to assure the Shareholders that the audit is effective, the Auditor is required to confirm to the Audit Committee its independence from

our management in connection with the audit. PricewaterhouseCoopers LLP has confirmed its independence from our management in connection with the audit of our consolidated financial statements for the years ended December 31, 2022 and December 31, 2021.

All services provided by the Auditor are subject to the pre-approval of the Audit Committee through established procedures and a written policy. Management provides regular updates to the Audit Committee of the services that the Auditor undertakes on the Company’s behalf. As part of its mandate, the Audit Committee manages the Company’s relationship with the Auditor, through, among other things, a formal review of the performance of the Auditor.

During 2022, the Audit Committee met with the Auditor and members of management to review the overall scope and specific plans for the audit of our consolidated financial statements. In addition, the Auditor was engaged to review our unaudited quarterly consolidated financial statements and earnings releases and discussed these with management and the Audit Committee during the relevant quarters. Representatives of the Auditor meet with the Audit Committee in the absence of management representatives as part of each regularly scheduled meeting of the Audit Committee.

The Auditor, the Audit Committee and management maintain regular and open communications regarding the audit of our financial statements. No disagreement arose among the Auditor, the Audit Committee and our management on any matter affecting the audit of our financial statements.

For the years ended December 31, 2022 and 2021, the fees for audit, audit-related, tax and all other services provided to the Company by PricewaterhouseCoopers LLP were the following:

Fees(in USD$ thousands)	2022^1^	2021^1^
Audit Fees^2^	2,531	1,734
Audit-Related Fees^3^	84	249
Tax Fees^4^	43	250
All Other Fees^5^	74	36

Notes:

1.	Amounts represent actual and estimated fees related to the respective fiscal years noted. Amounts are billed and<br>paid in CAD, GBP, and EUR and have been translated to USD using the average exchange rate for the respective years noted. Audit Fees and Audit-Related Fees represented 96% of all fees paid to the Auditor in 2022 and 87% of all fees paid to the<br>Auditor in 2021.
2.	Audit fees relate to the integrated audit of our annual consolidated financial statements and the effectiveness<br>of internal control over financial reporting as of December 31, 2022, reviews of our interim consolidated financial statements, and statutory audits of the financial statements of our subsidiaries.
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3.	Audit–related fees include employee benefit audits, services associated with registration statements,<br>prospectuses, and other documents filed with securities regulators, and due diligence assistance.
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4.	Tax fees relate to tax compliance, tax advice, and tax planning services.
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5.	All other fees relate to fees in connection with translation services and limited assurance engagements relating<br>to climate matters.
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For additional information concerning the Audit Committee and its members see “Audit Committee” in the Annual Information Form, which is available at www.sedar.com and www.sec.gov/edgar.shtml under the Company’s profiles.

ADVISORY RESOLUTION ON THE COMPANY’S APPROACH TO EXECUTIVE COMPENSATION (SAY ON PAY)

Our executive compensation philosophy, policies and programs are based on the fundamental principle of pay-for-performance to align the interests of our executives with those of our Shareholders. This compensation approach allows us to attract and retain high-performing executives who will be strongly incentivized to create value for our Shareholders on a sustainable basis. As a Shareholder you are asked to consider and approve the following advisory (non-binding) resolution:

Resolved, on an advisory basis and not to diminish the role and responsibilities of the Board of Directors, that the Shareholders accept the approach to executive compensation disclosed in the Company’s management information circular delivered in advance of the 2023 annual general and special meeting of the Shareholders of the Company.

Because your Say on Pay vote is advisory, it will not be binding upon the Board. However, the HR&C Committee will review and analyze the results of the vote and take into consideration such results when reviewing executive compensation philosophy, policies and programs. The Board confirms that the Company’s current practices achieve substantially the same results as the Canadian Coalition for Good Governance’s “Say on Pay” Policy for Boards of Directors released in September 2010.

We have held advisory votes on our approach to executive compensation at each annual meeting of Shareholders since 2014. In the most recent “Say on Pay” vote in April 2022, 95% of the votes were voted FOR the Company’s approach to executive compensation.

The management proxyholders intend to vote FOR the approval of the advisory (non-binding) resolution on executive compensation, except in relation to Shares held by a Shareholder who instructs otherwise.

RESOLUTION TO RECONFIRM THE SHAREHOLDER RIGHTS PLAN

The Company is party to a shareholder rights plan agreement, initially implemented on April 9, 2020, which plan was ratified and confirmed by the Company’s Shareholders at the 2020 annual meeting of the Company. The Rights Plan will terminate as of the close of the Meeting unless Shareholders vote at the Meeting to continue its operation.

At a meeting on February 14, 2023, the Board approved, subject to the approval of Shareholders, the continuation of the Rights Plan between the Company and Computershare Investor Services Inc., as successor to TSX Trust Company (formerly AST Trust Company (Canada)), as Rights Agent.

Upon approval, the Rights Plan will continue for the balance of the nine-year term of the original Rights Plan, subject to approval of its continuance by the Shareholders of the Company at the annual meeting of the Company in 2026. Failing reconfirmation as required under the Rights Plan, the Rights Plan and all outstanding Rights thereunder will terminate.

At the Meeting, you will be asked to consider and, if deemed advisable, pass a resolution, reconfirming the Rights Plan. The Rights Plan must be approved by a resolution of: (i) a simple majority of 50% plus one vote of the votes cast by Shareholders, whether in person or by proxy, at the Meeting; and (ii) a simple majority of 50% plus one vote of the votes cast by the Independent Shareholders (as defined in the Rights Plan), whether in person or by proxy, at the Meeting. As of the record date for the Meeting, based on publicly available information, to the knowledge of the Company there are no holders of Common shares that are not Independent Shareholders.

If the Rights Plan is not approved at the Meeting, the Rights Plan will terminate at the end of the Meeting. If the Rights Plan is approved at the Meeting, it will remain in effect and will next require reconfirmation by Shareholders at the 2026 annual meeting of the Shareholders. A summary of the Rights Plan is included below and a complete copy of the Rights Plan is attached to this Circular as Schedule “A”.

The full text of the Rights Plan is available under our profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. In the event of any conflict between the provisions thereof. Capitalized terms used in this

section “Resolution to Reconfirm the Shareholder Rights Plan” but not otherwise defined have the meaning given to those terms in the Rights Plan.

Purpose

The Company believes it is appropriate to continue with the Rights Plan to protect Shareholders. A rights plan is an effective device to deter accumulations of controlling blocks of shares without paying a premium and to maximize leverage regarding the timing and outcome of an unsolicited take-over bid. The basic objectives of the Rights Plan are to deter abusive tactics by making them unacceptably expensive to the unsolicited bidder and to encourage prospective acquirors to negotiate with the Board rather than to attempt an unsolicited hostile take-over or a creeping bid or accumulation of control (including negative control).

The Rights Plan limits acquisitions by a Shareholder or a group acting jointly or in concert that would result in the ownership or control of 20% or more of the issued and outstanding Common shares through means that are exempt from the formal take-over bid rules and to provide Shareholders with an equal opportunity to participate in a take-over bid and receive full and fair value for their shares. To accomplish this, the Rights Plan provides for the issuance to all holders of Common shares of Rights to acquire additional Common shares at a significant discount to the then-prevailing market price, which could, in certain circumstances, become exercisable by all holders of Common shares other than the potential acquiror and its joint actors. The terms of the Rights Plan are substantially similar to the terms of rights plans adopted recently by other substantial Canadian issuers. Holders of Class B Common shares will be issued Rights if those shares are converted to Common shares prior to the Separation Time (as defined below).

The Rights Plan encourages a potential acquiror who makes a take-over bid to proceed either by way of a Permitted Bid (described below), which generally requires a take-over bid to satisfy certain minimum standards designed to promote fairness, or with the concurrence of the Board. If a take-over bid fails to meet these minimum standards and the Rights Plan is not waived by the Board, the Rights Plan provides that holders of Common shares, other than the acquiror and its joint actors, will be able to purchase additional Common shares at a significant discount to market, thus exposing the person acquiring shares to substantial dilution of its holdings.

As at the date hereof, West Fraser is not aware of any pending or threatened take-over bid for the Company and approval of the Rights Plan is not being proposed in response to or in anticipation of any pending or threatened take-over bid, nor to deter take-over bids generally, but to encourage fair treatment of West Fraser Shareholders in connection with a take-over bid and to protect against “creeping bids.”

In continuing with the Rights Plan, the Company and the Board considered the existing legislative framework governing take-over bids in Canada. The Canadian Securities Administrators (the “CSA”) adopted amendments to that framework in 2016 that, among other things, lengthen the minimum bid period to 105 days (from the previous 35 days), require that all non-exempt take-over bids meet a minimum tender requirement of more than 50% of the outstanding securities held by Shareholders other than the offeror, its affiliates and persons acting jointly or in concert with the offeror, and require a 10-day extension after the minimum tender requirement is met. A target issuer has the ability to voluntarily reduce the minimum bid period to not less than 35 days and the minimum bid period may be reduced due to the existence of certain competing take-over bids or alternative change in control transactions.

As the legislative amendments do not apply to exempt take-over bids, there continues to be an important role for rights plans in protecting Canadian public companies and preventing the unequal treatment of Shareholders.

Rights plans continue to be adopted to address the following concerns:

Protecting against “creeping bids” (the accumulation of 20% or more of shares through purchases exempt from Canadian take-over bid rules, such as (a) purchases from five or fewer Shareholders under private agreements at a premium to the market price (not to exceed 115% of the market price, including brokerage fees and commissions), and not available to all Shareholders, (b) acquiring control or effective control through the accumulation of shares over a stock exchange or other published market without paying a control premium (known as the 5% ordinary course purchase exemption), or (c) through other transactions outside of Canada that may not be jurisdictionally subject to Canadian take-over bid rules), and requiring the bid to be made to all Shareholders; and

Preventing a potential acquiror from entering into lock-up agreements with existing Shareholders prior to launching a take-over bid, except for permitted lock-up agreements as specified in the Rights Plan. This prevents the use of “hard” lock-up agreements by offerors whereby existing Shareholders commit to tender their shares to an offeror’s take-over bid in lock-up agreements that are either irrevocable or revocable but subject to restrictive termination conditions. Such agreements could have the effect of deterring other potential bidders from bringing forward competing bids, particularly where the number of locked-up shares would make it difficult or unlikely for a competing bidder’s bid to achieve the 50% minimum tender requirement imposed by the take-over bid rules.

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In recent years, unsolicited take-over bids have been made for a number of Canadian public companies, many of which had shareholder rights plans. We believe this demonstrates that the existence of a shareholder rights plan does not prevent the making of an unsolicited bid. Further, in a number of these cases, a change of control ultimately occurred at a price in excess of the original offer price. There can be no assurance, however, that the Rights Plan would serve to bring about a similar result.

The Rights Plan does not preclude any Shareholder from using the proxy mechanism of the BCBCA, the Company’s governing corporate statute, to promote a change in the management or direction of the Company, and will have no effect on the rights of Shareholders to requisition a meeting of Shareholders in accordance with the provisions of applicable legislation.

The Rights Plan is not expected to interfere with the day-to-day operations of the Company. Neither the existence of the outstanding Rights nor the issuance of additional Rights in the future will in any way alter the financial condition of the Company, impede its business plans or alter its financial statements. In addition, the Rights Plan is initially not dilutive. However, if a Flip-in Event (described below) occurs and the Rights separate from the Common shares as described below, reported earnings per share and reported cash flow per share on a fully diluted or non-diluted basis may be affected. In addition, holders of Rights not exercising their Rights after a Flip-in Event may suffer substantial dilution.

The Rights Plan provides that holders of Common shares may tender to take-over bids that meet the Permitted Bid criteria. Furthermore, even in the context of a take-over bid that does not meet the Permitted Bid criteria, the Board is always bound to consider any take-over bid for the Company and consider whether or not it should waive the application of the Rights Plan in respect of such bid. In discharging such responsibility, the Board will be required to act with a view to the best interests of the Company and the adoption of the Rights Plan does not affect the duty of the Board to do so.

Review

As part of the review of the Rights Plan, the Company and the Board considered matters including (i) developments in shareholder rights plans and securities legislation since the amendments to the take-over bid regime were adopted in 2016, (ii) the terms and conditions of rights plans recently adopted by other substantial Canadian public companies, (iii) recent experience involving rights plans in the context of take-

over bids, and (iv) the commentary of the investment community on these plans. The Company and the Board are satisfied that the Rights Plan is consistent with the latest generation of Canadian rights plans.

Adoption and Approval

The Rights Plan became effective on April 9, 2020 upon approval and adoption by the Board. The Rights Plan was then ratified and confirmed by the Company’s Shareholders at the 2020 annual meeting of the Company. On February 14, 2023, the Board approved the continuation of the Rights Plan subject to approval by Shareholders. Provided the Shareholders reconfirm the Rights Plan at the Meeting, and also reconfirm at the Company’s annual meeting in 2026, the Rights Plan will continue and will expire upon the conclusion of Company’s annual meeting in 2029.

Issue of Rights

One Right was issued and attached to each Common share outstanding when the Rights Plan was adopted on April 9, 2020, and will attach to each Common share issued prior to the earlier of the Separation Time (as defined below) and the expiration time (the “Expiration Time”) of the Rights Plan.

Rights Exercise Privilege

The Rights will separate from the Common shares and will be exercisable for 10 trading days (the “Separation Time”) after a person has acquired, or commences an offer to acquire, 20% or more of the Common shares, other than by an acquisition pursuant to a take-over bid permitted by the Rights Plan (a Permitted Bid (defined below)). The acquisition by any person (an “Acquiring Person”) of more than 20% of the Common shares, other than by way of a Permitted Bid, is referred to as a “Flip-in Event.” Any Rights held by an Acquiring Person will become void upon the occurrence of a Flip-in Event. Ten trading days after the occurrence of the Flip-in Event, each Right (other than those held by the Acquiring Person) will permit the purchase of Common shares having an aggregate market price on the date of consummation or occurrence of such Flip-in Event equal to twice the exercise price for an amount in cash equal to the exercise price. For instance, if the market price at the Separation Time is $100 it would translate to an exercise price of $500 and entitle the holder to acquire Common shares worth $1,000.

Certificates and Transferability

Prior to the Separation Time, the Rights will be evidenced by the applicable certificates for Common shares or by the applicable book entry form registration for the associated Common shares and will be transferable only together with, and will be transferred by a transfer of, such associated Common shares issued from and after adoption of the Rights Plan on April 9, 2020 and will not be transferable separately from Common shares. From and after the Separation Time, the Rights will be evidenced by Rights certificates, which will be transferable and traded separately from the Common shares.

PermittedLock-up Agreements

The Rights Plan requires that a person making a take-over bid must structure any lock-up agreement so as to provide reasonable flexibility to the Shareholder in order to avoid being deemed the beneficial owner of the Common shares subject to the lock-up agreement and potentially triggering the provisions of the Rights Plan.

Under the Rights Plan, a person will not be deemed to “beneficially own” any security where the holder of such security has agreed to deposit or tender such security pursuant to a “Permitted Lock-up Agreement”.

A Permitted Lock-up Agreement is essentially an agreement between a person and one or more holders of Common shares pursuant to which each locked-up person agrees to deposit or tender Common shares to the locked-up bid and which further (i) permits the locked-up person to withdraw their Common shares in order to deposit or tender the Common shares to another take-over bid or support another transaction at a price or value that exceeds the price under the lock-up bid; or (ii) permits the locked-up person to withdraw their Common shares in order to deposit or tender the Common shares to another take-over bid or support another transaction at an offering price that exceeds the offering price in the locked-up bid by as much as or more than a specified amount and that does not provide for a specified amount greater than 7% of the offering price in the lock-up bid.

Permitted Bid Requirements

The Rights Plan is “triggered” when a person acquires or announces its intention to acquire 20% or more of the Common shares, unless the take-over bid has been conducted in accordance with a stringent set of requirements outlined in the Rights plan (a “Permitted Bid”) or the Rights Plan is waived by the Board.

The requirements for a Permitted Bid include the following:

•	The take-over bid must be made to all holders of record of Common shares;
•	The take-over bid must contain an irrevocable and unqualified condition that no Common shares will be taken up<br>or paid for:
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o	prior to the close of business on a date that is not less than 105 days following the date of the bid, or<br>such shorter minimum period as determined in accordance with section 2.28.2 or section 2.28.3 of National Instrument 62-104 - Take-Over Bids and Issuer Bids (“NI62-104”) for which a take-over bid (that is not exempt from any of the requirements of Division 5 (Bid Mechanics) of NI 62-104) must remain open for deposits of<br>securities thereunder, in the applicable circumstances at such time, pursuant to NI 62-104, and
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o	unless, at the close of business on the date Common shares are first taken up or paid for under such bid,<br>more than 50% of the then outstanding Common shares held by Independent Shareholders shall have been tendered or deposited pursuant to the bid and not withdrawn;
---	---
•	Unless the take-over bid is withdrawn, shares may be tendered or deposited at any time during the period in<br>which the take-over bid must remain open in accordance with the requirements of NI 62-104, and any shares tendered or deposited pursuant to the take-over bid may be withdrawn until taken up and paid for<br>(subject to certain exceptions in the case of a partial take-over bid in accordance with the requirements of NI 62-104); and
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•	If a majority of the outstanding Common shares held by Independent Shareholders have been tendered or<br>deposited and not withdrawn as described above, the offeror must make a public announcement of that fact and the take-over bid must be extended for a period of not less than 10 days from the date of such public announcement.
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The Rights Plan allows for a competing Permitted Bid (a “Competing Permitted Bid”) to be made while a Permitted Bid is in existence. A Competing Permitted Bid must satisfy all the requirements of a Permitted Bid, except that the minimum deposit period may be shorter as prescribed by NI 62-104.

Under the Rights Plan, “Independent Shareholders” means holders of any Common shares, other than (i) any Acquiring Person; (ii) any offeror (other than any person who is not deemed to beneficially own the Common shares held by such person); (iii) any affiliate or associate of any acquiring person or offeror; (iv) any person acting jointly or in concert with any acquiring person or offeror; and (v) any employee benefit plan, stock purchase plan, deferred profit sharing plan and any similar plan or trust for the benefit of employees of West Fraser or a subsidiary of West Fraser, unless the beneficiaries of the plan or trust direct the manner in which the Common shares are to be voted or withheld from voting or direct whether the Common shares are to be tendered to a take-over bid.

Waiver and Redemption

The Board may, prior to a Flip-in Event, waive the dilutive effects of the Rights Plan in respect of a particular Flip-in Event resulting from a take-over bid made by way of a take-over bid circular to all holders of Common shares, in which event such waiver would be deemed also to be a waiver in respect of any other Flip-in Event occurring under a take-over bid made by way of a take-over bid circular to all holders of Common shares. The Board may also waive the Rights Plan in respect of a particular Flip-in Event that has occurred through inadvertence, provided that the Acquiring Person that inadvertently triggered such Flip-in Event reduces its beneficial holdings to 20% or less of the outstanding Common shares within 14 days or such other period as may be specified by the Board. With the majority consent of holders of Common shares or Rights holders at any time prior to the occurrence of a Flip-in Event, the Board may redeem all, but not less than all, of the outstanding Rights at a price of $0.00001 each.

Exemptions for investment advisors (for client accounts), managers of mutual funds, trust companies (acting in their capacity as trustees and administrators), statutory bodies managing investment funds (for employee benefit plans, pension plans, insurance plans or various public bodies), registered pension funds, plans or related trusts and their administrators or trustees, and Crown agents or agencies acquiring greater than 20% of the Common shares are exempted from triggering a Flip-in Event, provided that they are not making, or are not part of a group making, a take-over bid.

Amendment

The Board may amend the Rights Plan with the approval of a simple majority of the votes cast by the Independent Shareholders (or the holders of Rights if the Separation Time has occurred) voting in person or by proxy at a meeting duly called for that purpose. The Board may, without such approval, correct clerical or typographical errors and, subject to such approval at the next meeting of the Shareholders (or holders of Rights, as the case may be), may make amendments to the Rights Plan to maintain its validity due to changes in applicable legislation.

Term

If Shareholders do not reconfirm the Rights Plan at the Meeting, it will terminate at the close of the Meeting. If Shareholders approve the Rights Plan, it must be subsequently reconfirmed by the Independent Shareholders at every third annual meeting following the Meeting. If the Rights Plan is not so reconfirmed or is not presented for reconfirmation at such annual meeting, the Rights Plan and all outstanding Rights thereunder shall terminate and be void and of no further force and effect on and from the date of termination of such annual meeting.

Certain Canadian Federal Income Tax Considerations

The Company will not be required to include any amount in computing the Company’s income for the purposes of the Income Tax Act(Canada) (the “ITA”) as a result of the issuance of the Rights.

Under the ITA, the issuance of Rights to a recipient could be considered as a taxable benefit, the value of which is required to be included in computing the income of a Canadian resident recipient or is subject to withholding tax in the case of a recipient who is not a resident of Canada. In any event, however, no amount in respect of the value of the Rights on issuance is required to be included in computing income, or subject to withholding tax, if the Rights do not have any value at the date of issue. The Company considers that the Rights have negligible value when issued, there being only a remote possibility that the Rights will ever be exercised.

The foregoing does not address the Canadian income tax consequences of other events such as the separation of the Rights from the Common shares, the occurrence of a Flip-in Event or the redemption of Rights. A holder of Rights could be required to include an amount in computing income or be subject to withholding tax under the ITA if the Rights become exercisable or are exercised. A holder of Rights may be subject to tax under the ITA in respect of the proceeds of disposition of such Rights.

This statement is of a general nature only and is not intended to constitute nor should it be construed to constitute legal or tax advice to any particularholder of Common shares. Such Shareholders are advised to consult their own tax advisors regarding the consequences of acquiring, holding, exercising or otherwise disposing of their Rights, taking into account their own particular circumstances andany applicable federal, provincial, territorial or foreign legislation.

Recommendation of the Board of Directors

Management considered and reviewed, with support from external counsel, the Rights Plan and analysis of the continuation of a shareholder rights plan for the Company, considering matters including (i) developments in shareholder rights plans and securities legislation since the Rights Plan was adopted in 2020, (ii) the terms and conditions of rights plans recently adopted by other large Canadian companies, and (iii) the commentary of the investment community on these plans. The Board is satisfied that the Rights Plan remains consistent with the latest generation of Canadian rights plans.

It is not the intention of the Board, in recommending the ratification of the Rights Plan, to either secure the continuance of the directors or management of the Company or to preclude an acquisition of control of the Company in a transaction that is fair and in the best interests of the Shareholders. The rights of Shareholders under existing law to seek a change in management of the Company or to influence or promote action of management in a particular manner will not be affected by the Rights Plan. The Rights Plan provides that Shareholders may tender to take-over bids that meet the Permitted Bid criteria. Furthermore, even in the context of a take-over bid that does not meet the Permitted Bid criteria, the Board is always bound to consider any take-over bid for the Company and consider whether or not it should waive the application of the Rights Plan in respect of such bid. In discharging such responsibility, the Board will be obligated to act honestly and in good faith with a view to the best interests of the Company, and the confirmation of the Rights Plan does not affect the duty of the Board to comply with these obligations.

Management and the Board recommend that Shareholders vote FOR the ordinary resolution set forth below. The management proxyholders intend to vote FOR this resolution except in relation to shares held by a Shareholder who instructs otherwise.

VotingRequirements

At the Meeting you will be asked to approve the ordinary resolution set out below. In order to be effective, the resolution to be voted on will require the approval of a simple majority of the votes cast by the Shareholders and a simple majority of the votes cast by the Independent Shareholders. As of the record

date for the Meeting, based on publicly available information, to the knowledge of the Company there are no holders of Common shares that are not Independent Shareholders. The Board reserves the right to alter any terms of the Rights Plan prior to its ratification and approval by Shareholders at the Meeting if the Board determines that it would be in the best interests of the Company and its Shareholders to do so in light of any developments subsequent to the date of this Circular. In such circumstance, a news release would be issued and the further updated Rights Plan would be filed on SEDAR and EDGAR and presented to Shareholders for approval at the Meeting if the Board determines to revise the Rights Plan, or the Board could determine to not proceed with the Rights Plan at any time prior to the Meeting.

The text of the proposed resolution is as follows:

“BE IT RESOLVED THAT:

1.	The continuance, amendment and restatement of the Rights Plan, the terms and conditions of which are set out<br>in the Rights Plan to be dated on or about April 18, 2023, between the Company and Computershare Trust Company of Canada, as Rights Agent, as approved by the Board on February 14, 2023, and substantially as described in the Management<br>Proxy Circular of the Company dated March 9, 2023, be and is hereby ratified, confirmed and approved without amendment;
2.	The actions of the directors of the Company in adopting the Rights Plan and in exercising and delivering the<br>Rights Plan be and are hereby ratified, confirmed and approved; and
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3.	Any director or officer of the Company be and is hereby authorized and directed to execute and deliver for<br>and in name of and on behalf of the Company all such certificates, instruments, agreements, documents and notices and to do all such other acts and things as in such person’s opinion may be necessary or desirable for the purpose of giving<br>effect to this resolution.”
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Management and the Board recommend that Shareholders vote FOR the ordinary resolution set forthabove.

OUR CORPORATE GOVERNANCE POLICIES AND PROCEDURES

Governance Policy

Our Board believes that sound governance practices are essential to the effective and efficient operation of the Company and to the enhancement of Shareholder value. We established a corporate governance policy (the “Governance Policy”) in 2002 which was updated and re-approved by our Board on September 7, 2022. The Governance Policy is reviewed annually by the Governance Committee which, from time to time, recommends updates and changes to such policy to the Board as may be required. The full text of the Governance Policy may be reviewed on our website at www.westfraser.com.

The following disclosure has been prepared under the direction of our Governance Committee and has been approved by the Board.

Chair of the Board

Hank Ketcham retired from his role as our Executive Chair effective April 19, 2016 and assumed the position of Chair of the Board. Hank Ketcham was appointed our President and CEO in 1985 and assumed the role of Chair of the Board in 1996. In 2012, he relinquished the title of President and, on March 1, 2013, Mr. Ketcham retired as our CEO and was designated as our Executive Chair of the Board. Ted Seraphim was appointed our President on April 19, 2012 and also became our CEO on March 1, 2013.

As part of our senior leadership transition plan, Ray Ferris replaced Mr. Seraphim as our President on April 19, 2018 and replaced Mr. Seraphim as our CEO on June 30, 2019.

For his duties as Chair of the Board, the Board has approved, on the advice of the HR&C Committee, Hank Ketcham’s annual Chair retainer in the aggregate amount of $200,000 per annum, exclusive of annual Director base and equity retainers. As of May 1, 2016, Mr. Ketcham was permitted to elect to receive all or a portion of his compensation in DS Units. Mr. Ketcham ceased to participate in our Bonus Plan after 2014 and ceased to participate in our long-term incentive plans as of January 1, 2016.

The Board has considered the issue of the Chair’s relationship with management in the context of the need to ensure the Board’s independence from management and has determined that the Chair is sufficiently aligned with Shareholder interests to ensure Board independence from management. The Chair is a director and minority shareholder, and is related to the other directors and shareholders, of Ketcham Investments, Inc., whose shareholdings are described under “Voting Securities and Principal Shareholders”. The Board considers that these relationships assure that the interests of the Chair are closely aligned with Shareholder interests and independent of management.

The Board has developed a formal position description for the position of Chair of the Board, which provides that the Chair of the Board leads the Board in its supervision of the business and affairs of the Company and its oversight of management. The responsibilities of the Chair include, among other things: (a) managing the affairs of the Board and monitoring its effectiveness; (b) ensuring that all matters of strategic importance are being dealt with at the Board level during the course of the year; (c) facilitating the Board’s and management’s efforts to promote engagement with, and feedback from, Shareholders and other stakeholders; (d) acting as an advisor to, and principal sounding board for, the CEO; (e) communicating to the CEO any matters arising from the Board’s meetings or meetings with Shareholders and other stakeholders that require management’s attention; and (f) supporting and assisting the Board, the HR&C Committee and the Governance Committee in the evaluation of, and succession planning for, the CEO.

Governance & Nominating Committee

The Board has established a Governance Committee comprised entirely of independent Directors. The mandate of the Governance Committee is summarized later in this Circular under “Committees of the Board”. The Board, through the Governance Committee, monitors changes to the regulatory, business and investment environments with respect to governance practices and regularly reviews governance issues with a view to ensuring that both our Governance Policy and our actual practices continue to serve the best interests of our Shareholders, employees and other stakeholders.

Majority Voting Policy

In February 2011, the Board reviewed and adopted a majority voting policy on the recommendation of the Governance Committee. The majority voting policy has been updated from time to time since adoption including the most recent amendment in February 2021 and reviewed and re-approved annually by the Board. Under this policy, a Director who is elected in an uncontested election with more votes withheld than cast in favour of their election will be required to tender their resignation to the Chair of the Board. If such a Director refuses to tender their resignation, such Director will not be nominated for election the following year. The resignation will be effective when accepted by the Board, and any Director who tenders their resignation may not participate in the deliberations of either the Committee or the Board which relate to such Director’s resignation. This policy does not apply to an election that involves a proxy contest.

The Governance Committee will convene a meeting and will consider the offer of resignation and make its recommendation to the Board on whether the resignation should be accepted. The Governance Committee

will generally be expected to recommend to the Board that it accept the resignation, except in exceptional circumstances. The Board expects that resignations will be accepted unless there are exceptional circumstances that warrant a contrary decision. The Board will announce its decision (including the reasons for not accepting any resignation) by way of a news release within 90 days of the date of the Shareholders’ meeting at which the election occurred, and a copy of the news release will be provided to the TSX and the NYSE. Management will not re-nominate for re-election any Director who fails to comply with this policy.

In addition, subject to the requirements of the Articles and the BCA, in the event a majority of the members of the Governance Committee receive a greater number of votes withheld than votes for their election, the other Directors will appoint a Committee consisting only of those other Directors and solely for the purpose of considering the tendered resignations and such Committee will convene a meeting and recommend to the Board whether or not to accept these resignations.

Advance Notice Policy

Pursuant to the advance notice policy adopted by the Board on February 13, 2014, and subsequently incorporated as an amendment to our Articles following approval by Shareholders on April 29, 2014, any additional Director nominations for the Meeting must have been received by the Company no later than the close of business on March 20, 2023. No such nominations have been received as of the date of this Circular. If no such nominations are received by the Company prior to such date, management’s nominees for election as Directors set forth above will be the only nominees eligible to stand for election at the Meeting. The advance notice provisions provide Shareholders, Directors and management of the Company with a clear framework for nominating Directors. See our Articles on SEDAR at www.sedar.com, EDGAR at www.sec.gov/edgar.shtml and our website at www.westfraser.com for the terms of our advance notice provisions.

Code of Conduct

In 2004, the Board approved a code of conduct for the Company and its Directors, officers and employees (the “Code of Conduct”). The Code of Conduct was most recently amended on April 20, 2021 **** and has been filed on SEDAR under the Company’s profile. The Code of Conduct sets out expectations for compliance with laws, safety and health, environmental stewardship, discrimination and harassment, conflicts of interest, ethical conduct, fair dealing and other areas.

The Code of Conduct also establishes a “whistleblower” procedure for the reporting by any person of potential breaches of the Code of Conduct or other misconduct, including complaints regarding accounting, internal accounting controls or auditing matters. On February 13, 2014, the Board approved amendments to the Code of Conduct which included provisions prohibiting certain insiders who are subject to minimum shareholding requirements from purchasing financial instruments designed to hedge or offset any decrease in the market value of our Shares, Options or units, and, on February 18, 2015, the Board approved amendments to the Code of Conduct, which included additional provisions related to the Company’s commitment to human rights and compliance with anti-bribery laws.

On December 11, 2018, the Board approved further amendments to the Code of Conduct to: (a) provide that the Code of Conduct applies to West Fraser’s contractors, consultants, agents and representatives when acting on behalf of West Fraser; (b) emphasize and expand West Fraser’s commitment to environmental stewardship and supporting the communities in which West Fraser operates; (c) bolster our anti-discrimination and anti-harassment policies in order to ensure a work environment free from discrimination and harassment, in particular sexual harassment; (d) expand the anti-bribery and anti-corruption policy both in terms of persons covered and the activities prohibited; and (e) more clearly articulate provisions relating to substance abuse.

In February 2020, the Board approved additional amendments to the Code of Conduct, to align it with current best practices, to provide protection over confidential personal information and to clarify the Company’s expectations regarding the maintenance of Company records and the participation by employees with internal and external investigations.

Further amendments were made to the Code of Conduct in April 2021 for compliance with SEC guidelines that issuers acknowledge the requirement to provide full, fair, accurate, timely and understandable disclosure in reports and documents filed with the SEC. At the same time, the whistleblower provision was updated to further clarify the option for any person to report misconduct through the reporting hotline.

The Code of Conduct includes an acknowledgement with respect to compliance to be confirmed by each Director and each member of management. All Directors, members of management and substantially all salaried employees periodically confirm compliance with the Code of Conduct and any instances of non-compliance are reported to the Board. In 2022, no waivers of the application of the Code of Conduct were requested of, or granted by, the Board. The full text of the Code of Conduct may be viewed on our website at www.westfraser.com.

Anti-Trust Policy

On September 8, 2021, the Company adopted the Anti-Trust Policy outlining our commitment to comply with all applicable competition and antitrust laws, which are in place to prevent activities among competitors that could unfairly control the market and harm the consumer and not engage in activities that would reasonably appear to be an unfair trade practice, unreasonable restraint of trade or an attempt to use a dominant position to discourage competition. We expect all our employees, officers and Directors to comply with the Anti-Trust Policy, a full copy which is available at: www.westfraser.com.

Charters

The Board has developed and approved formal charters for each of the Audit, HR&C, Governance, and Health, Safety & Environment Committees as well as formal position descriptions for each of the positions of Chair of the Board and CEO. The charters of these Committees and position descriptions are reviewed annually and revised, as required, by the Board.

On December 11, 2018, the Board approved amendments to the position descriptions of the Chair of the Board and CEO. The Chair of the Board’s general mandate is to ensure the effective and independent conduct of the Board. The CEO’s general mandate is to implement the Company’s strategic and operating plans and enhance Shareholder value.

The Governance Committee Charter was updated and re-approved by the Board on December 7, 2021 to include some housekeeping matters.

The Health, Safety & Environment Committee Charter was revised and re-approved by the Board on February 15, 2022.

The Audit Committee Charter is reviewed annually and was revised by the Board in 2017 and was again reviewed and updated in February 2020 to provide, among other things, that the Audit Committee would have oversight responsibility over the information technology, cyber security and information systems risks and on April 20, 2021, following the listing of Common shares on the NYSE, the Audit Committee Charter was further revised for compliance with NYSE rules and regulations and conformity with best corporate governance practices. These changes included certain administrative matters such as setting out the matters under the Audit Committee’s oversight responsibility, other disclosure-oriented process items such as

specifying that the Audit Committee will review with management and the Auditor all news releases that contain first time disclosure of significant financial information and certain technical items such as setting out in detail the independence and financial literacy qualifications for Audit Committee members.

On December 10, 2019, the Board reviewed and re-approved the HR&C Committee Charter. The HR&C Committee Charter was further updated on February 11, 2021, to provide for conformity with best practices related to engagement of outside advisors or consultants and the NYSE rules for determination of independence of HR&C Committee members. The HR&C Committee Charter was further updated on December 7, 2021 to approve amendments that were part of the adoption of the Pension Oversight Committee of management into the governance structure.

The Company continues to review its Committees’ charters for updates and changes as may be required in connection with best practices and regulatory and stock exchanges requirements and will continue to monitor and update its Committees’ charters as necessary to comply with applicable law and current best governance practices.

These materials may be viewed on our website at www.westfraser.com.

Minimum Equity Holding

Under our Equity Holding Requirements Policy, the minimum equity holding requirement for Directors is a number of Shares or DS Units having a value of not less than three times a Director’s total annual base and equity retainers. Based on the current retainer amounts, this would total $600,000.

Shares, DS Units, Norbord DSUs (in the case of Ms. Lawson and Ms. McMorrow) and RS Units held by a Director are eligible to be included in determining whether the minimum equity holding requirement has been met (but Options and PS Units are not eligible). For the purposes of such calculation, Shares, DS Units and Norbord DSUs (in the case of Ms. Lawson and Ms. McMorrow) held by a Director will be valued annually based on the greater of (1) their original cost or grant date value, and (2) the Closing Price on December 31 of the most recently completed financial year (or, if such date is not a trading date, on the last trading date of such year). This policy requires that all Directors meet the minimum equity holding requirement within five years of election or appointment and, if after any annual valuation of a Director’s equity holdings the value of the Director’s holdings fall below the requirement, the Director will have one year to regain compliance.

If a Director exceeds the minimum equity holding requirement, the Director may elect to receive, in lieu of DS Units, all or a designated portion of their annual equity retainer in cash.

For a description of the equity holdings of the Directors as of the Record Date, see the chart under the heading “Payment of 2022 Compensation”. The equity holding requirements for senior executives are described under “Executive Equity Holding Requirements”.

Director Equity Holdings

(as at December 31, 2022)

Name	Shares	DS Units	Total	Value^1^^^($)	MeetsRequirement?
Hank Ketcham	395,896	1,748	397,644	38,877,654	Yes
Reid E.<br>Carter	3,000	12,903	15,903	1,554,836	Yes
Ray Ferris	39,452	Nil	39,452	3,857,222	Yes

Name	Shares	DS Units	Total	Value^1^^^($)	MeetsRequirement?
John N. Floren	Nil	8,045	8,045	786,560	Yes
Ellis Ketcham Johnson	1,004,990	Nil	1,004,990	98,257,872	Yes
Brian G. Kenning	1,200	7,287	8,487	829,774	Yes
Marian Lawson^2^	Nil	5,239	5,239	512,217	No^2^
Colleen M. McMorrow^2^	Nil	4,595	4,595	449,253	No^2^
Robert L. Phillips^4^	11,000	18,398	29,398	2,874,242	Yes
Janice G. Rennie	1,000	20,944	21,944	2,145,465	Yes
Gillian D. Winckler	1,750	8,561	10,311	1,008,106	Yes

Notes:

1.	Based on the Closing Price on December 31, 2022 of $97.77. Equity holdings and compliance under the Equity<br>Holding Requirements Policy are valued and assessed annually.
2.	Ms. Lawson and Ms. McMorrow were appointed to the Board on February 1, 2021 on completion of the<br>Norbord Acquisition and are permitted to meet the minimum shareholding requirement within five years of their appointment.
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3.	DS Units held by Ms. Lawson and Ms. McMorrow include both DS Units and Norbord DSUs, which have been<br>adjusted by the Exchange Ratio and to be paid in Common shares in accordance with the terms of the Norbord Acquisition. See “Norbord RSU Plan and DSU Plans”.
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4.	Mr. Phillips is not standing for re-election at the Meeting.<br>
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Mandate of the Board

Our Board has expressly assumed overall responsibility for the stewardship of the Company, including responsibility for: (i) adoption of a strategic planning process and approval of a strategic plan; (ii) identification of the principal risks to our business and implementation of appropriate systems to manage these risks; (iii) succession planning, including appointment, training and monitoring of our senior management; (iv) implementation of a communication policy regarding our disclosure of corporate information; and (v) ensuring the integrity of our internal controls and management information systems including accounting systems.

The Board met 11 times in 2022. Independent Directors also met without management at every Board meeting in 2022. During the regularly scheduled meetings, the Board received, reviewed and contributed to management’s strategic planning and operating and capital plans, taking into account identified business opportunities and business risks. In conjunction with the ongoing planning process, the Board regularly reviews, with management, the strategic environment, the emergence of new opportunities and risks, and the implications for our strategic direction.

The Board has, with the advice of management, identified the principal risks to our business and has overseen management’s establishment of systems and procedures to ensure that these risks are monitored. These systems and procedures provide for the effective management of our manufacturing assets, forest resources and financial resources, and compliance with all regulatory obligations. Management prepares and submits annually to the Board a matrix identifying key short-term and long-term enterprise risks together with an analysis of each risk and management’s mitigation strategy. In addition, management regularly reports to the Board on key evolving or new focus risks. The annual risk matrix and the focus risks are reviewed by the Board and consideration is given to any changes in circumstances that could either heighten or diminish the nature of a particular risk. The Board understands that our major risks are associated with safety, the environment, climate change and sustainability, access to raw materials our product end markets, recruitment and retention, and cyber security.

The Board receives and reviews regular reports on our operations, including reports dealing with safety and environmental issues.

The Board is responsible for the supervision of our senior management to ensure that our operations are conducted in accordance with objectives set by the Board. All appointments of senior management are approved by the Board. As part of our planning process, succession planning for senior management positions is regularly reviewed and discussed.

ESG Oversight

Our commitment to sustainability starts at the top and at the Board level. Our Board of Directors is responsible for overseeing overall management and integration of sustainability, climate change and environmental, social, and governance (“ESG”) matters throughout the Company. This includes overseeing sustainability strategies and monitoring the practices of the Company relating to health and safety, workplace diversity, equity and inclusion. The Board’s goal is to ensure we operate as a sustainable business, optimizing financial returns while effectively managing risk. ESG governance, risk oversight and disclosure is a regular topic of discussion at Board and committee meetings.

The Company’s approach to ESG continues to grow and evolve in line with the needs, demands and expectations of its shareholders, regulators and stakeholders. In 2021, the Board and management conducted a comprehensive review of our sustainability and ESG-related approach and evaluated both the best practices and approaches of our peers.

As a result of the review, our Board has delegated oversight of certain ESG responsibilities to its Committees and management, which report their findings and provide recommendations to the Board. As ESG is a cross-functional discipline encompassing a wide range of issues, and thus is relevant to all Committees, different aspects of our ESG performance fall under each of our Committees and management. The Committees work together with management to identify ESG issues most pertinent to the Company’s business and its key stakeholders, and to help develop the policies and processes to integrate ESG into the Company’s long-term strategy and risk management responsibilities.

Oversight of governance-related ESG policies and programs is a responsibility that was specifically added in 2021 to the Charter of the Governance Committee, which also is responsible for monitoring diversity at the Board level, corporate governance practices and compliance with the Code of Conduct. In addition to oversight responsibility for the Company’s annual financial statements and audits, the Audit Committee ensures that financial risks, compliance matters and ethics complaints are properly managed and addressed. The HR&C Committee oversees the goals and risks associated with the Company’s compensation programs and oversight of the equity holding policy and the clawback policy. The Health, Safety and Environment Committee is responsible for, among other things, overseeing the Company’s key environmental and sustainability objectives established by management and the Board and reviewing the Company’s current sustainability report. Furthermore, management reports to the Board on issues related to stakeholder engagement, particularly with respect to relationships with local communities and Indigenous peoples and our actions to meaningfully advance reconciliation.

At the management level, West Fraser’s CEO and executive team are responsible for implementing the Company’s strategy and sustainability targets. The Vice-President, Canadian Woodlands oversees compliance with Canadian forestry regulations and certification. He is responsible for the practice and maintenance of sustainable forest management, strategic issues with regard to forest management-related environmental performance, climate risks and opportunities, and forest carbon. The Senior Vice-President, Western Canada oversees pulp and bioproducts manufacturing, bioenergy development, projects, energy reduction initiatives and greenhouse gas emissions reporting. The Manager, Energy & Bioproduct Development leads corporate initiatives in energy reduction, bioproduct research and development and greenhouse gas emissions reporting. The Senior Vice-President, Corporate and Government Relations is responsible for the Company’s sustainability report and regularly engages with federal and provincial

governments on climate policy, and the Company’s environmental performance. The Chief Environment and Sustainability Officer assists West Fraser’s operations to meet climate and carbon policy and regulations that may affect the Company or manufacturing facilities.

A snapshot of the Board’s delegated responsibilities to its Committees as related to ESG matters is as follows:

LOGO

Corporate Disclosure Policy

The Board has, as part of our Governance Policy, approved a corporate disclosure policy (the “Corporate Disclosure Policy”), to be overseen by a disclosure committee (the “Disclosure Committee”) that is intended to ensure that all material information relating to the Company is communicated appropriately to our Shareholders and the public. On February 15, 2022, the Disclosure Policy was revised and the Corporate Disclosure Committee was modified from seven members to a minimum of five members and maximum of seven members, comprised of the CEO, the Senior Vice-President, Finance and CFO and senior leadership from operations, sales and legal as designated by the CEO and the Senior Vice-President

and CFO from time to time. Under the Corporate Disclosure Policy, the Disclosure Committee will be responsible for reviewing and approving all material continuous disclosure, including annual and interim financial statements, management discussion and analysis and financial results press releases, other press releases that contain material information or disclosure of first-time significant financial information, information circulars, annual information form, annual reports, prospectuses and other offering or tender documents. The Disclosure Committee will review these materials before they are provided to the Board or the applicable Board committee for review and approval. The Corporate Disclosure Policy may be viewed on our website at www.westfraser.com. In addition to annual meetings of Shareholders, meetings are held from time to time each year between management representatives and various investors, investment analysts, credit rating agencies and financial institutions, all of which are governed by the Corporate Disclosure Policy.

Audit Committee

The Board, through the Audit Committee, is responsible for overseeing our financial reporting and audit process and requiring that management has designed and implemented and maintains an effective system of internal controls and management information systems. The Audit Committee generally meets twice annually with the Auditor to discuss the annual audit. These meetings are in addition to regular meetings, in which the Auditor participates, during which the Audit Committee reviews and approves certain of our quarterly reports. The Audit Committee has been delegated the authority to approve our quarterly financial statements and quarterly earnings announcements before publication, other than those related to the fourth quarter and annual results. At regular meetings, the Audit Committee also meets separately and in -camera with the Auditor without management and separately and in -camera with management without the Auditor. The Audit Committee has complete and unrestricted access to the Auditor.

In 2022, the Audit Committee focused on these key areas:

•	reviewing significant accounting and financial reporting issues and assessing the appropriateness of our<br>financial reports;
•	overseeing and assessing the adequacy and effectiveness of our internal control procedures over annual and<br>interim financial reporting;
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•	managing our relationship with the Auditor, through, among other things, a formal review of the performance of<br>the Auditor;
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•	reviewing with management the adequacy and effectiveness of our systems for monitoring compliance with<br>financial reporting and disclosure laws, including disclosure controls and procedures;
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•	overseeing compliance with our Code of Conduct and the process through which complaints (including regarding<br>accounting, internal accounting controls or auditing matters or other misconduct) are received and dealt with, including confidential and anonymous submissions and those that are of a sensitive or “whistleblower” nature; and<br>
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•	identifying and overseeing our principal information technology, cyber security, information security and<br>information technology networks and information systems risks.
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In order to provide reasonable assurance that our financial reporting is complete, fairly presented and employs appropriate accounting principles, the Audit Committee reviews the following documents with management and the Auditor and recommends them to the Board for approval:

•	annual and interim financial statements and reports; and
•	the related management’s discussion and analysis of financial performance.
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The Audit Committee reviews with management and the Auditor relevant and applicable legal and regulatory developments and the adoption and disclosure of new accounting standards. It also assesses the potential impacts of choosing between accounting alternatives.

As part of its mandate, the Audit Committee is responsible for reviewing any related party transaction in which a Director or a member of senior management has an interest, and making recommendations to the Board. The Audit Committee reviews such transactions in accordance with applicable legislation to ensure they reflect market terms and conditions, are at commercial arm’s length terms, and are in the best interests of the Company. The Audit Committee has the ability to retain independent advisors to provide advice on any proposed related party transactions. Any recommendations or advice pertaining to a specific matter is then communicated to the Board.

The Audit Committee receives regular briefing materials from management, at least semi-annually, on information technology, cyber security, information security and information technology networks and information systems risks, including details of top threats, risk management activities, vendor and supply chain monitoring, and internal training and awareness programs.

We rely on industry accepted security measures and technology to protect our information systems and confidential and proprietary information. Our information security management systems are based on ISO27001: 2022. See the “Risks and Uncertainties - Information Technology and Cyber Security” section of our Management’s Discussion and Analysis for the year ended December 31, 2022, for a discussion of the related risks and uncertainties associated with our business. The Company does not carry cyber security insurance.

Decisions Requiring Prior Approval by the Board

The Board has overall responsibility for the stewardship of the Company. Any responsibility that is not delegated to management or to a Committee remains with the full Board. We maintain policies with respect to matters requiring prior approval of the Board. These policies, and understandings between management and the Board through previous Board practice and accepted legal practice require that our annual operating and capital plans, significant capital expenditures and all transactions or other matters of a material nature involving the Company or any of its subsidiaries must be presented by management for approval by the Board.

Shareholder Feedback and Concerns

The Board and management welcome interaction with our Shareholders and believe that it is important to have direct regular and constructive engagement with our Shareholders to permit open dialogue and the exchange of ideas.

West Fraser communicates with its Shareholders and other stakeholders through various channels, including our annual report, management information circular, annual information form, quarterly reports, news releases, website, presentations at investor and industry conferences and other materials prepared in connection with the continuous disclosure requirements of the TSX, the NYSE and securities regulatory authorities. In addition, our quarterly earnings call is open to all Shareholders. Our website, at www.westfraser.com, also provides extensive information about the Company and all news releases issued by us are available on the website for viewing.

We maintain a policy of ongoing communication with investors and with representatives of the investment community. This process consists of periodic meetings with investment fund managers and investment analysts as well as individual investors and Shareholders, although always in circumstances that assure full compliance with disclosure requirements.

Inquiries by Shareholders are directed to, and dealt with by, members of senior management. Shareholders and potential investors are encouraged to communicate on any issues, including those relating to executive and Director compensation, directly with members of our senior management. All communications are subject to our Corporate Disclosure Policy. Shareholders may communicate their views to senior management by contacting our main investor contact as set out below:

West Fraser Timber Co. Ltd.
858 West Georgia Street, Suite 1500
Vancouver, British Columbia
V6C 3E8
Attention: Robert B. Winslow, CFA, Director, Investor Relations & Corporate<br>Development
Email: [email protected]

Our Board values regular and constructive engagement with Shareholders and encourages Shareholders to express their views on governance matters directly to the Board. Questions regarding our governance practices can be sent to the Chair as set out below:

West Fraser Timber Co. Ltd.
858 West Georgia Street, Suite 1500
Vancouver, British Columbia
V6C 3E8
Attention: Chair of the Board

Expectations of Management

The Board has determined its expectations of management, which include provision of information and implementation of processes that enable the Board to identify risks and opportunities for the Company, the identification of appropriate comparisons and benchmarks against which our performance may be measured, and the provision of information and data that permits the Board to monitor ongoing operations, and management understands these expectations. As part of the ongoing process of monitoring the performance of management, the Board receives operational updates on each of our business units at each Board meeting. These updates compare actual performance to our annual plan and historical results and include a discussion of all significant variances.

As part of the monitoring process, the CEO submits to the Board at the beginning of each year a written report setting out goals, expectations and priorities for the year. These are reviewed by the Board and may be varied based on the Board’s comments. At the end of the year, a report is submitted to the Board by the CEO that sets out achievements relative to the original goals and expectations. Both the Board and the CEO expect that the level of those achievements will be taken into account when establishing the CEO’s compensation for the following year.

Composition of the Board

Independence

We are required to assess and disclose which of our Directors are, or are not, “independent” of management as that term is used in National Instrument 52-110 – Audit Committees (“NI 52-110”). We also assess the independence of our Directors under the applicable rules of the NYSE. 10 of our 11 current Directors are independent, while Ray Ferris is considered not independent. Below is a summary of the basis of our determinations in respect of all current and proposed Directors:

Name	Determination and Basis
Hank Ketcham	Independent (see commentary below)
Doyle<br>Beneby^2^	Independent
Reid E. Carter	Independent
Ray Ferris	Non-independent<br> <br>(Basis for Determination: Currently our President and CEO)
John N. Floren	Independent
Ellis Ketcham Johnson	Independent (see commentary below)
Brian G. Kenning	Independent
Marian Lawson	Independent
Colleen M. McMorrow	Independent
Robert L.<br>Phillips^1^	Independent
Janice G. Rennie	Independent
Gillian D. Winckler	Independent

Notes:

1.	Mr. Phillips is not standing for re-election at the Meeting.<br>
2.	Mr. Beneby has been nominated as a Director at the Meeting.
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Where an individual is, or has been within the last three years, an employee or executive officer of an issuer, NI 52-110 provides that such individual is deemed to have a material relationship with the issuer and thus would be considered non-independent of the issuer.

Hank Ketcham was appointed our President and CEO in 1985 and assumed the role of Chair of the Board in 1996. In 2012, he relinquished the title of President and, on March 1, 2013, Mr. Ketcham retired as our CEO and was designated as our Executive Chair of the Board. Hank Ketcham retired from his role as our Executive Chair effective April 19, 2016 and assumed the position of Chair of the Board. As of the Record Date, more than five years has elapsed since Hank Ketcham served in any executive capacity with the Company, and seven years will have elapsed as of the date of the Meeting. Since Hank Ketcham’s retirement as our CEO, the Board has engaged in a board renewal process, which has resulted in the expansion of the size of our Board from nine Directors to 11 Directors and the appointment of six new Directors with no prior relationship with Mr. Ketcham. Mr. Ketcham does not engage in any related party transactions with the Company and does not have any consulting, advisory or other contractual arrangements with the Company outside of his role as the non-executive Chair and a member of the Board.

Having regard to Hank Ketcham’s past relationships with the Company and considering his current relationships with management and the Company and the passage of time and other factors, the Board determined that there are no “material relationships” (within the meaning of NI 52-110) which could, in the view of the Board, be reasonably expected to interfere with Hank Ketcham’s exercise of independent judgment. The Board also considered the issue of the Chair’s relationship with management in the context of the need to ensure the Board’s independence from management and determined that the Chair is sufficiently aligned with Shareholder interests to ensure Board independence from management. The Chair is a director and shareholder, and is related to the other directors and shareholders, of Ketcham Investments, Inc., whose shareholdings are described under “Voting Securities and Principal Shareholders”. The Board also considers that these relationships assure that the interests of the Chair are closely aligned with Shareholder interests.

Ellis Ketcham Johnson was appointed to the Board at the Company’s annual general meeting held April 20, 2021. Ellis Ketcham Johnson is a cousin of Hank Ketcham, the Company’s current Chair and former member of our management. The Board has considered this relationship and interest, including the shareholding interests of Ellis Ketcham Johnson and those of Hank Ketcham, and the fact that neither Ellis Ketcham Johnson nor Hank Ketcham are executives or employees of the Company and do not have

any other material financial, familial or other relationship with the Company or its executives, and has determined that Ellis Ketcham Johnson is sufficiently independent of our management and has interests aligned with Shareholders to the extent that such independence qualifies her to be a member of the Board and make a valuable contribution in that role.

The Governance Committee is currently comprised of Robert Phillips (Chair), Reid Carter, John Floren, Brian Kenning and Janice Rennie, all of whom are independent Directors. The Governance Committee was reconstituted to its current membership effective April 20, 2022. The Governance Committee meets without any members of management present as part of each regularly scheduled meeting of the Board. There were four such meetings during 2022.

Diversity – Board and Executive Officers

The Company is committed to providing equal opportunities for individuals who have the necessary qualifications for employment and advancement within the Company. The Company’s objectives, as outlined in its Policy on Diversity Equity and Inclusion as well as its Human Rights, Discrimination & Harassment Policy that is part of our Code of Conduct and its employment practices, include providing an equal opportunity for employment and advancement and a work environment that is free of discrimination and harassment, including based on gender, race, ethnicity, disability or sexual orientation. The Company believes inclusive diverse teams build vibrant workforces, safer operations, and a stronger and more competitive company overall.

If all of the management nominees are elected to the Board, 5 of the 10 of the independent Directors (50%) on the Board and 5 of the 11 directors (45%) will be women and 1 of the 10 of the independent Directors (10%) on the Board and 1 of the 11 directors (9%) will be non-gender diverse.

The Company and its major subsidiaries have in the aggregate eighteen executive officers, including three executives who are gender or non-gender diverse. Although, the Company has not adopted any formal targets regarding gender or non-gender diverse candidates in Director and executive positions, we do consider diversity when considering Director candidates and making employee hiring or advancement decisions. In 2019, we adopted the Board Diversity Policy (described below). The Company firmly believes that all of its stakeholders benefit from the broader exchange of perspectives and balance brought by diversity of background, thought and experience. The Company’s commitment to inclusion and diversity is demonstrated through several facets, including initiatives in recruitment and retention, diversity and inclusion training, the consideration of diversity in employee development and advancement decisions, and workshops for identified diverse successors.

The Company does consider diversity to be important and believes that its current framework for evaluating Board and executive officer candidates takes into account diversity along with a broad variety of factors the Company considers appropriate. The Company also encourages female and minority candidates to apply for vacant positions, and the Company is an equal opportunity employer.

The Company strives to create workplaces and leadership teams that are reflective of the diverse communities where we live and work. Creating a culture of belonging for all employees aligns with our other core values of teamwork, respect, humility, and integrity. Our diversity, equity and inclusion approach applies to all levels of our organization and is foundational to achieving our strategic objectives to attract and retain engaged, talented, and high-performing people.

The Company’s objectives in advancing or recruiting new candidates is to attract, employ and retain engaged, talented and high-performing individuals who bring value to the Company and its Shareholders by possessing a suitable mix of qualifications, experience, skills and expertise. It is ultimately the skills,

experience, characteristics and qualifications of the individual that are most important in assessing the value the individual could bring to the Company.

Board Diversity Policy

The Company recognizes the benefits of inclusion and diversity in its broadest sense and considers inclusion and diversity at the Board level to be an essential element of Board effectiveness. The Company views inclusion and diversity on the Board as leading to a better understanding of opportunities, issues and risks; enabling stronger decision-making; and ultimately improving our performance and ability to provide strategic oversight and maximize Shareholder value. To continue progress on this goal, in February 2019, the Board adopted a formal, written policy relating to Board diversity, including gender diversity (the “Board Diversity Policy”). The purpose of the Board Diversity Policy is to promote an environment within the Company that will attract and advance those Director candidates with the widest range of knowledge, skills and experience. While all Director appointments are made based on merit, the Board expects that when selecting and presenting candidates to the Board for appointment, the Governance Committee will consider not only the skills, experience and expertise of a candidate, but also other factors, including gender, race, ethnicity, age and geography to ensure that the Board has a diverse membership. Moreover, the Board recognizes that gender diversity is a significant aspect of diversity and acknowledges the important role that women with the relevant skills and experience can play in contributing to a diversity of perspectives on the Board.

While the Board does not support fixed percentages or quotas for achieving diversity, in recruiting candidates for nomination, the Board and the Governance Committee consider a variety of factors including decision-making ability, skill, geography, experience with businesses of a comparable size, diversity of backgrounds and perspectives, gender, race, ethnicity, age, the interplay of a candidate’s skills and experience with the skills and experience of other Board members and the extent to which a candidate would be a desirable addition to the Board.

The Governance Committee may from time to time consider adopting measurable objectives for achieving diversity on the Board, including gender and minority diversity, and recommend such objectives to the Board for adoption.

The Board Diversity Policy requires the Governance Committee to review and monitor the implementation of the policy on an annual basis to ensure its effectiveness and report the results of its review to the Board. The Board currently has five female Directors. A copy of the Board Diversity Policy is available on the Company’s website at www.westfraser.com.

In addition to the Board Diversity Policy, the charter of the Governance Committee provides that the Governance Committee will review and make recommendations to the Board on the composition of the Board in order to ensure that the Board has the requisite expertise and that its membership consists of persons with sufficiently diverse and independent backgrounds, with a view to facilitating effective decision-making. Similarly, in the process of identifying candidates for executive officer appointments, the Company considers whether our senior executive group consists of persons with sufficiently diverse and independent backgrounds.

Serving on Other Boards

Each of Doyle Beneby, Janice Rennie, Marian Lawson, Colleen McMorrow and Gillian Winckler is an active corporate director serving on several corporate boards. The Board and the Governance Committee have reviewed each of their board memberships and determined that they have devoted, and are expected

to continue to devote or in the case of Mr. Beneby expected to devote, the required time and attention to discharge their duties as members of our Board.

Ms. Rennie and Ms. Winckler have each demonstrated a strong understanding of West Fraser’s business, have been and are well prepared for all Board and Committee proceedings, and make consistent and valuable contributions to those proceedings. Similarly, since closing of the Norbord Acquisition in February 2021, when Ms. Lawson and Ms. McMorrow joined the Board of West Fraser, they have each been well prepared and ready for all Board and Committee proceedings. In 2022, Ms. Rennie, Ms. Lawson and Ms. McMorrow each maintained a 100% attendance record at Board and Committee meetings. Ms. Winckler attended 100% of the Board and Health, Safety & Environment Committee meetings and 75% of the Audit Committee meetings. They also made themselves available to meet with management and fellow Directors, and attend tours of the Company’s facilities on an ad hoc basis whenever required to do so.

The disclosure under “Information regarding Nominees for Election as Directors” lists the other public company directorships held by our Directors. West Fraser does not limit the number of outside directorships. The Governance Committee discusses our Director expectations with potential candidates to ensure the candidates understand the time commitments and expectations before agreeing to be nominated as a Director of the Company.

Committees of the Board

The Board has concluded that Committees should be kept to a minimum so that all members of the Board are able to participate in discussions on significant issues. Matters that are outside of management’s authority are reported to and approved by the Board.

Committees may engage outside advisors at the expense of the Company. Under the Governance Policy an individual Director may, with the approval of the Board, retain an outside advisor at the Company’s expense.

The Board has appointed the following four Committees, each of which is comprised entirely of Directors who are not members of our management: Audit Committee; HR&C Committee; Health, Safety & Environment Committee; and Governance Committee.

In order to facilitate open and candid discussion, in -camera sessions are held at every Committee meeting without management present. It is also the practice of each Committee to meet in -camera during each of its meetings. Topics discussed at these meetings include, but are not limited to, Board processes, succession planning, executive assessments, organizational changes, and strategy.

Each Committee chair helps ensure that their Committee governs itself independently of management and discharges its mandate in accordance with the Committee’s charter. Each chair also sets the agenda for their Committee meetings in consultation with other members of the Committee, the Board and senior management, as needed.

Audit Committee

Chair:	Reid E. Carter
Other Members:	Ellis K. Johnson
	Colleen M. McMorrow
	Janice G. Rennie
	Gillian D. Winckler

The Audit Committee is responsible for reviewing our annual financial statements and making recommendations as to the approval of the annual financial statements by the Board. Material issues related to the audit of our internal control and management information systems are discussed by management representatives and the Audit Committee as they arise. The Audit Committee has been delegated the authority to approve our quarterly financial statements and quarterly earnings announcements before publication other than those related to our fourth quarter and annual results. The Audit Committee has direct access to the Auditor and is responsible for approving the nomination, and establishing the independence, of the Auditor. The role of the Audit Committee has been discussed at various times with our Auditor.

Under NI 52-110, the Audit Committee must be comprised of independent directors. An “independent director” is a director that has no direct or indirect material relationship with the Company, including not being affiliated with management or the Company in terms of specific familial or commercial relationships. Each member of our Audit Committee is considered “independent” and, in addition, “financially literate” as such terms are used in NI 52-110.

Additional disclosure concerning the Audit Committee is contained in our Annual Information Form. The full text of the Audit Committee Charter, which forms part of our Annual Information Form, is available for viewing on our website at www.westfraser.com. The Audit Committee Charter is reviewed at least annually and was last revised by the Board on April 20, 2021.

Human Resources & Compensation Committee

Chair:	Brian G. Kenning
Other Members:	John N. Floren
	Marian Lawson
	Robert L. Phillips
	Janice G. Rennie

The HR&C Committee consists of at least three members who must be independent directors. The independence of each Director on the HR&C Committee is determined in accordance with the applicable securities laws and in accordance with the applicable rules of the NYSE.

The HR&C Committee is responsible for reviewing and making recommendations to the Board with respect to the remuneration of our executive management and the remuneration of each Director, and has the authority to grant Options to officers and employees under our Stock Option Plan (described below), although in practice the Board gives final approval of all Option grants. The HR&C Committee reviews the remuneration of Directors and executive management each year. The HR&C Committee oversees succession planning of our executive management and reviews and makes recommendation to the Board on proposed executive management appointments. Under its mandate, the HR&C Committee is authorized to retain or obtain the advice of independent compensation consultants, legal counsel and other advisors.

In December 2019, the HR&C Committee reviewed the HR&C Committee Charter and made recommendations to update it in accordance with best practices and to, among other things, supplement the HR&C Committee’s responsibilities to oversee the Director remuneration every two years and CEO emergency succession planning. These recommendations were approved by the Board on December 10, 2019. In connection with the listing of the Common shares on the NYSE on February 1, 2021, the Company revised the HR&C Committee Charter on February 11, 2021 to address certain NYSE requirements. Further amendments related to the NYSE listing were also made on December 7, 2021. The HR&C Committee Charter may be viewed on our website at www.westfraser.com.

Health, Safety & Environment Committee

Chair:	John N. Floren
Other Members:	Ellis K. Johnson
	Marian Lawson
	Colleen M. McMorrow
	Gillian D. Winckler

The Health, Safety & Environment Committee is responsible for monitoring our health, safety and environmental performance, including West Fraser’s short- and long-term environmental and sustainability objectives and assessing the Company’s performance with respect to such objectives. The Health, Safety & Environment Committee conducts an ongoing review of our health, safety and environment related policies and performance, including compliance with applicable laws and regulations. The Health, Safety & Environment Committee also reviews the suitability and effectiveness of safety and environment management systems and the environment sustainability certification programs to which we subscribe. The Committee is also responsible for periodically reviewing West Fraser’s disclosure of responsibility, sustainability, and health, safety and environmental reports. The Health, Safety & Environment Committee Charter is reviewed at least annually and was last revised by the Board on February 15, 2022. The Charter of the Health, Safety & Environment Committee may be viewed on our website at www.westfraser.com. Additional information about our environmental, social and governance policies and practices can be found on the “Responsibility” section of our website and in our Responsibility Report on our website, as well as in our Annual Information Form that can be found on our website and also under the Company’s profiles on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml.

Governance & Nominating Committee

Chair:	Robert L. Phillips
Other Members:	Reid E. Carter
	John N. Floren
	Brian G. Kenning
	Janice G. Rennie

The Governance Committee is comprised of Directors, each of whom is “independent” of management as that term is used in NI 52-110.The Governance Committee is responsible for providing support for the governance role of the Board and, as part of that support, reviews and makes recommendations on the composition of the Board, periodically assesses the function of the Board and its Committees, and monitors developments in corporate governance. The Governance Committee is also responsible for reviewing and monitoring the Company’s exposure to risks and opportunities related to governance practices, ethics, compliance, and independence of Directors. In addition, the Governance Committee is responsible for establishing criteria and procedures for identifying candidates for election to the Board, engaging search firms, where necessary, and recommending to the Board nominees to stand for election as Directors. The Governance Committee Charter was last reviewed and revised by the Board on December 7, 2021. The Governance Committee Charter may be viewed on our website at www.westfraser.com.

Orientation Program and Continuing Education

New Directors receive a broad range of materials that provide both historical and forward-looking information concerning West Fraser, its operations, senior management and the Board, and its strategic objectives. As part of our orientation program, new Directors have an opportunity to meet with senior management to discuss our business, receive historical and current operating and financial information and

are encouraged to tour our facilities. Directors have access to an archive of Board materials, including management presentations from prior meetings. In addition to the formal orientation and continuing education programs, in connection with the appointment of Marian Lawson and Colleen McMorrow, the Governance Committee implemented a custom program for their orientation including an overview of the Company’s key policies, codes and mandates and briefings on the Company’s operations, business and key issues. A similar customized orientation program was also developed and implemented for Ellis Ketcham Johnson by the Governance Committee. In connection with the appointment of new Directors, the Governance Committee will develop and implement similar orientation programs customized for each candidate’s skills and experience.

We regularly provide and organize continuing education programs for all Directors. Our continuing education programs include regular presentations by senior executives about emerging issues, risks and topics relevant to our business and operations and the regulatory environment, as well as information packages developed to enhance the Director’s understanding of the subject matter. Furthermore, special subjects are also covered with a view to keeping the Directors informed and up to date in relation to industry developments, new legislation that affects operations and distribution, major files and projects, as well as economic, political, sustainability and ESG trends. External experts are also invited from time to time to speak on various topics. Committee chairs may also coordinate education sessions on specific topics for their Committee members.

The continuing education sessions and presentations by our senior executive and external experts to our Board during 2021 and 2022 included the following subject matter and topics:

Subject	Topic	Presenter
2022
Sustainability	• Environment and<br>Sustainability Update	Senior Management
	• Environment and<br>Climate Strategy	Senior Management
Regulatory & Government Affairs	• Canadian Countervail<br>and Antidumping	Senior Management
Operations	• U.S. Lumber and<br>Orientated Strand Board	Senior Management
	• U.S. South Timber<br>Market and Cost Outlook	External Expert
	• Global Outlook in Wood<br>Products Supply/Demand Trends	External Expert
	• Strategic Analysis of<br>Plywood and Engineered Wood Products in North America	External Expert
	• U.S. Land<br>Ownership	Senior Management/ <br>External<br>Expert
Technology	• Deploying<br>Technology	Senior Management
2021
Sustainability	• Forestry Climate and<br>Social License Update	External Expert
	• Environment and<br>Climate Strategy	Senior Management
	• Forest Products<br>Industry and Carbon Capture	External Expert
	• Carbon Strategy<br>Update	Senior Management
	• ESG Assessment and<br>Strategy	Senior Management
Regulatory & Government<br>Affairs	• British Columbia and Alberta Stumpage Overview	Senior Management
	• B.C. Forest Policy Update – Old growth, First Nations and Timber<br>Tenure	Senior Management
	• First Nations Overview	Senior<br>Management
Governance	• Governance —<br>Trends and Best Practices	External Expert
	• Enterprise Risk Matrix<br>Overview	Senior Management

Operations	• Introduction to Pulp Industry and Operations	Senior Management
	• Introduction to Lumber Industry and Operations	Senior Management
	• Introduction to OSB Industry and Operations	Senior Management
	• U.S. South Industry<br>Manufacturing Operating Environment	Senior Management
Capital Markets and Finance	• Future of<br>Housing	External Expert
	• Capital Allocation<br>Perspectives	External Expert
	• West Fraser Market<br>Perspectives	External Expert
Technology	• Cyber Security<br>Overview	Senior Management

Board proceedings also include regular review of risk factors including detailed reviews of focus risks and periodic presentations by management and outside industry experts on important and evolving issues. Directors also visit and tour certain of our facilities on a regular basis which contributes to a more complete understanding of our business. Site visits also give Directors an opportunity to meet directly with management and other employees in those areas or regions.

Each of our Directors has had, or currently has, executive or Board of Director responsibilities and there is a regular sharing of those experiences, which assists our Board in identifying and adopting, on a continuing basis, best corporate governance practices.

A key part of each regularly scheduled Board meeting is a business overview provided by the CEO. This overview includes an operational and financial review, but also provides perspectives on growth strategies, human resources, political, legal and regulatory issues and material changes in our risk environment. These discussions help our Directors to understand the full scope of our underlying business environment when making decisions that affect our future.

We also encourage individual Directors to participate in outside professional development programs. We pay for these expenses as long as the Chair of the Board and the Chair of the Governance Committee approve the program in advance. They are also provided with corporate subscriptions to certain relevant industry publications. All of our Directors are members of the Institute of Corporate Directors (“ICD”), which provides continuing education for directors through publications, seminars and conferences.

On an ongoing basis, the Company:

•	ensures that Directors have timely access to materials and information required to properly discharge their<br>responsibilities;
•	maintains a secure Directors’ portal for prompt dissemination of information and provides published<br>information, industry publications, articles of interest and other relevant materials to Directors in between meetings; and
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•	canvasses Directors for suggestions as to topics and issues for which they would like to receive a<br>presentation, briefing or report.
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Individual Directors attended and, in some cases, were participants or presenters at, third party conferences, seminars, webinars and presentations on a broad range of topics in 2020, 2021 and 2022, including the following:

Topic	Presented By
2020<br>Year-End Executive Compensation	Willis Towers Watson
2021 National Corporate Governance<br>Conference	ICD
A New Executive Pay Landscape	Willis Towers Watson

Topic	Presented By
Board Cybersecurity Governance during<br>Geopolitical Conflict	ICD
Board Governance and Effectiveness	Hugessen
Board Oversight of Strategic Issues	ICD
Board Risk Oversight	Global Risk Institute
Board Role CEO Transitions	ICD
Canada’s Proposed Cybersecurity Bill<br>Key Insights	ICD
CEO Transitions and ESG action, measurement, disclosure and oversight	E&Y
Climate Action at the International<br>Level	Embassy of Canada
Continuing the Digital<br>Transformation	ICD
Corporate Reporting: How is the Landscape<br>Changing?	Toronto Climate Action Network
Corporate Reporting Update	Globe & Mail
CPAB Audit Committee Forum	CPAB
Cybersecurity Presentations	Various corporate issuers
Deloitte Audit Committee Webinar – The new global frontier (Climate Change and Global Warming)	Deloitte
Developments in the Evolution of<br>ESG	ICD
Dialogue with Indigenous Peoples	ICD
ESG Conference and Sustainability<br>Summit	Scotiabank
ESG Framework for Financial<br>Institutions	KPMG
ESG Investment Themes – The Perspective of the Institutional Investor	CN
Financial Reporting Developments	E&Y
Governance in Today’s World	ICD
Governance of Artificial<br>Intelligence	ICD
Human Resources and Compensation Committee Effectiveness	ICD
Hydrogen Economy	CPA
ICD National Conference	ICD
Indigenous Relations	CN
Just for Chairs	Ozone Advisory Group
Key Trends in Global Forestry	-
Next Level of Governance for the New<br>Normal	ICD
Proxy Season Preview: Regulatory and Disclosure Updates and the Evolution of ESG: The Agenda for Change	Fasken Institute
Responding to<br>COVID-19: Insights for Audit Committees	CPA Canada
Responding to<br>COVID-19: Insights for Audit Committees	Deloitte
Rethinking Risk Management	ICD
Shifting Ground – The Collision of Business and Government Policy	ICD
Safety Summit	EPCOR

Topic	Presented By
Social Purpose	ICD
Supply Chain Trends and Strategic Considerations (balancing efficiency and resiliency)	E&Y
The 2022 Board Agenda	KPMG
The CEO’s New Technology<br>Agenda	McKinsey
The Changing Role of CEOs and Corporations<br>in Society	ICD
The Future of Governance in Canada	ICD/TMX Committee
Transmission to Net Zero	ICD
Ukraine/Russian Market Impacts	FEA

Meeting Attendance Record

In 2022, the attendance record for Board and Committee meetings was 99%. The following chart sets out meeting attendance records of each of the current Directors during 2022, including each Committee of which the Director is currently a member.

		Committees
Director	Board<br><br><br>Meetings	Audit	Human Resources & Compensation	Health, Safety & Environment	Governance & Nominating
Hank Ketcham	11 of 11	Nil	Nil	Nil	Nil
Reid E. Carter	11 of 11	4 of 4	Nil	Nil	4 of 4
Ray Ferris	11 of 11	Nil	Nil	Nil	Nil
John N. Floren	11 of 11	Nil	3 of 3	3 of 3	4 of 4
Ellis Ketcham Johnson	11 of 11	3 of 3	Nil	3 of 3	Nil
Brian G. Kenning	11 of 11	Nil	3 of 3	Nil	4 of 4
Marian Lawson	11 of 11	Nil	3 of 3	3 of 3	Nil
Colleen M. McMorrow	11 of 11	4 of 4	Nil	3 of 3	Nil
Robert L.<br>Phillips^1^	11 of 11	Nil	3 of 3	Nil	4 of 4
Janice G. Rennie	11 of 11	4 of 4	3 of 3	Nil	4 of 4
Gillian D. Winckler	11 of 11	3 of 4^2^	Nil	3 of 3	Nil

Notes:

1. Mr.	Phillips is not standing for re-election at the Meeting.<br>
2. Ms.	Winckler did not attend one meeting of the Audit Committee due to a necessary conflict.<br>
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EXECUTIVE COMPENSATION DISCUSSION & ANALYSIS

Human Resources & Compensation Committee Responsibility

The HR&C Committee is responsible for recommending to the Board the level and nature of compensation for executive officers and Directors and may grant Options to officers and employees under the Stock Option Plan, although in practice the Board provides final approval of all compensation matters for Directors and executive officers, including Option grants. In making its determinations, the HR&C Committee has access to comparative data and, if considered appropriate, receives advice from selected independent consultants.

The HR&C Committee is also responsible for reviewing and recommending to the Board the approval of our compensation and benefits (including retirement and pension) philosophy and policies and any incentive compensation plans and equity based plans and assessing on an ongoing basis whether such compensation and benefits policies are consistent with the sustainable achievement of our business objectives, the prudent management of our operations and risks, and the promotion of adherence to our

Code of Conduct, its policies concerning safety and environmental stewardship and other material policies, procedures and controls. In reviewing such policies, the HR&C Committee may consider the recruitment, development, promotion, retention and compensation of executive management and other employees and any other factors that it deems appropriate.

The HR&C Committee also ensures that such compensation and benefit policies do not encourage unwarranted risk taking and undertakes annual risk assessments of these policies either through regular independent or internal reviews of material compensation -related risks. When it reviews and recommends compensation for the CEO and executive management, the HR&C Committee assesses the appropriateness of compensation relative to business risks undertaken by considering, among other things, adherence to our Code of Conduct and other material policies, procedures and controls, as well as any other factors it considers appropriate.

The HR&C Committee is also responsible for overseeing the financial position, governance, administration and compliance with statutory and regulatory requirements of the Company’s pension plans and reporting to the Board annually on these plans. The HR&C Committee also oversees talent development and succession planning for our executive management and annually reports to the Board on such planning.

Composition of the HR&C Committee

The HR&C Committee currently consists of five independent Directors, each of whom has held senior executive roles that have included involvement in executive compensation issues. The HR&C Committee met three times in 2022 to review matters relating to the compensation of executive officers. In addition to meetings, members of the HR&C Committee regularly receive reports and advice from independent consultants and members of executive management on executive compensation issues. None of the members of the HR&C Committee is indebted to the Company.

See also “Human Resources & Compensation Committee”.

Report on Executive Compensation

The policy of the HR&C Committee and the Board with respect to executive compensation is to provide compensation to each executive officer in the form of a base salary, employment benefits, performance related bonus, equity based long-term incentives and postretirement pension benefits in order to attract and retain a highly motivated, cohesive and results oriented management team. Total compensation for each executive officer (inclusive of long-term incentives and post-retirement pension benefits) is designed to be competitive with that provided by comparable companies in Canada to executive officers in similar positions as well as to align the interests of executive officers with those of our Shareholders and not encourage excessive risk taking. Each of the components of total compensation is established based on the following criteria:

Base Salary	–	to be at or below the median base salaries for comparable positions
Annual Incentive Bonus	–	based on our financial performance above a minimum return on shareholders’ equity, and targeted to be at or below the median for comparable positions
Long Term Incentive	–	to be above the median on long term incentives for comparable positions

Overall, the total compensation package (including long-term incentives and post-retirement pension benefits) is designed to compensate executive officers for above average, long-term, sustainable financial

results, and is designed to be competitive at the 50^th^ percentile for overall compensation for comparable positions.

In order to establish compensation for executive officers other than the CEO, the HR&C Committee receives recommendations with supporting documentation, including data on comparable compensation levels, from the CEO. The HR&C Committee considers the recommendations and comparative data and makes its recommendation to the Board. In respect of compensation for the CEO, the HR&C Committee bases its recommendation to the Board on its review of comparable compensation data for chief executive officer positions. **** In 2018, as part of its review the HR&C Committee considered a survey and report prepared by Willis Towers Watson (“Towers Watson”), a professional services firm, of our executive compensation program relative to those of different peer groups, which included a review of the compensation for the CEO and our other executive officers and comparable compensation data for chief executive officer and other executive officer positions of those peers. In 2021, the HR&C Committee updated its review and considered an updated survey and report prepared by Towers Watson of our executive compensation program relative to those of different peer groups.

In determining the comparability of similar positions in other companies, the HR&C Committee considers responsibility levels as well as industry similarity, annual revenues and cash flows, total assets, market capitalization and number of employees of the selected companies. For positions where compensation data is not comparable, internal guidelines and data are used.

The Company uses, and periodically participates in, broad-based compensation surveys prepared by independent consulting firms. As well, from time to time, the Company and the HR&C Committee may obtain specific benchmarking data prepared by independent consulting firms. This information, along with Company specific data, is considered when establishing compensation for executive officers.

In connection with the updated survey and report prepared in 2021 by Towers Watson of our executive compensation program relative to those of different peer groups, and on the recommendation of Towers Watson, the peer group for the compensation benchmarking study was updated in 2021 and is currently comprised of the publicly traded, Canadian and U.S. companies set out in the table below. Prior to the adoption of the updated peer group, the compensation peer group was based on the peer group in the 2018 survey and report and recommendation of Towers Watson.

Paper and Forest Products	Capital-Intensive
Resolute Forest Products Inc.	Finning International Inc.
Canfor Corporation	Gibson Energy Inc.
Cascades, Inc.	Keyera Corp.
Louisiana-Pacific Corporation	Methanex Corporation
Interfor Corporation	Parkland Corporation
Boise Cascade Company	WSP Global Inc.
	Kinross Gold Corporation
	Masco Corporation

Base Salaries

The HR&C Committee reviews executive management base salaries periodically and considers annual adjustments to be effective in October of each year. The most recent review of base salaries was conducted in September 2022.

In determining its September 2022 recommendations for the base salary of each executive officer, the HR&C Committee considered the comparative data for the peer group.

Annual Incentive Bonus Plan

The annual incentive bonus plan (the “Bonus Plan”) covers our CEO and our Vice-Presidents. The Bonus Plan is the variable compensation component of total executive compensation designed to compensate these officers annually based on the achievement of our objective annual financial return targets.

The annual bonus is calculated as a percentage of current base salary, with the percentage earned based on the adjusted net income (adjusted to exclude equity-based compensation expense or recovery and any accrual for bonuses to our senior executives, both on an after-tax basis) divided by average Shareholders’ equity (“ROSE”). If the ROSE for the year is below 5% for the applicable year, no bonuses are payable under the Bonus Plan. At the 5% ROSE level, bonuses for the Vice-Presidents are earned at 17.5% of base salary. The bonus percentage increases as the ROSE increases, and the bonus percentage earned will reach 100% of base salary at a 15% ROSE level, which is the maximum bonus percentage payable. The bonus percentage for the CEO is equal to 150% of the bonus percentage for other officers covered by the Bonus Plan for bonuses earned in 2022 and later years, and was 125% prior to 2022.

The Board may, in its discretion, also consider other issues, including safety and environmental performance, when determining the amount, if any, of bonuses earned under the Bonus Plan that will be paid.

In 2022, our earnings were $1,974 million, which resulted in an annual ROSE of 24.4% for 2022. This exceeded the bonus threshold and annual incentive bonuses of 100% of the base salary were awarded to the qualifying senior executives in accordance with the Bonus Plan (with the bonus percentage for the CEO equal to 150% of such bonus percentage) and were paid in 2023. In 2021, on an adjusted basis (adjusted by excluding equity-based compensation expense or recovery and any accrual for bonuses to our senior executives, both on an after-tax basis) our earnings were $2,947 million, which resulted in an annual ROSE of 42.4% for 2021. This exceeded the bonus threshold and annual incentive bonuses of 100% of the base salary were awarded to the qualifying senior executives in accordance with the Bonus Plan (with the bonus percentage for the CEO equal to 150% of such bonus percentage) and were paid in 2022. In 2020, the annual ROSE was 29% which exceeded the bonus threshold and annual incentive bonuses of a maximum of 100% of base salary were awarded to each of the qualifying senior executives in accordance with the Bonus Plan (with the bonus percentage for the CEO equal to 125% of such bonus percentage) and were paid in 2021. See also “Clawback Policy” which applies to the Bonus Plan.

Long-Term Incentive Component

The long-term incentive component of compensation is comprised of Options and phantom share units (which are either RS Units or PS Units) that are intended to directly align the long-term interests of our senior management with those of our Shareholders. The proportion of Options and phantom share units included in a long-term incentive grant will vary from time to time at the discretion of the Board. In 2019, the Board, on the recommendation of the HR&C Committee, changed the mix of the long-term incentive components of executive compensation to eliminate grants of RS Units and grant additional PS Units in their place in order to increase the award of performance-conditioned equity incentive components of executive compensation. As a result, approximately 50% of the value of the long-term incentives granted in 2022 and 2021 to executive officers (which consisted of only Options and PS Units) are performance-conditioned.

Stock Option Plan

The Board established the Stock Option Plan on February 24, 1994 as a means of recognizing contributions to the Company made by Directors, officers and employees and to provide a long-term incentive for their

continuing relationship with the Company and its subsidiaries. Directors ceased to participate under the Stock Option Plan in 2004. The Stock Option Plan has been amended from time to time. In February of 2021, the Stock Option Plan was amended to increase the number of Common shares that may be issued in respect of Options granted under it, to impose certain limits on the number of Options that may be issued to our insiders, to establish certain restrictions on amendments to the Stock Option Plan without Shareholder approval, to provide for certain automatic extensions for Options expiring during or within five business days of a blackout period under the Company’s Securities Trading Policy, and to address certain incidental housekeeping changes. In February of 2022, the Stock Option Plan was amended to provide that the cash value is determined using the VWAP as at the trading day prior to the date of exercise.

In addition, the Company has adopted Replacement Option Plans in connection with the Norbord Acquisition, pursuant to which the Company has issued Replacement Options. The Replacement Options carry substantially the same terms as the original Norbord Options, except that they are exercisable into Common shares and have been adjusted in accordance with the Exchange Ratio. The Replacement Option Plans exist solely to grant and administer the Replacement Options and did not require Shareholder approval under the policies of the TSX, as the aggregate number of Common shares issuable under them is less than 2% of the number of Common shares issued and outstanding prior to the Norbord Acquisition. Upon the exercise or expiry of all Replacement Options, the Replacement Option Plans will be terminated. See also “Option Grants”.

Outstanding and Authorized Options

Year	Outstanding	WeightedAverage Price	RemainingAuthorized	Total	% ofOutstandingCommonShares andClass BShares(Dilution)
2023^1^	966,341^2^	$81.16	774,329	1,740,670	2.1
2022^1^	841,305^3^	$76.19	910,424	1,751,729	2.1
2021^1^	1,077,840^4^	$66.64	1,025,337^5^	2,103,177	2.0
2020^1^	1,316,994	$53.64	182,506	1,499,500	2.2

Notes:

1.	As at the Record Date, December 31, 2022, December 31, 2021 and December 31, 2020,<br>respectively.
2.	Includes 862,192 under the Stock Option Plan and 104,149 under the Replacement Option Plans.<br>
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3.	Includes 728,381 under the Stock Option Plan and 112,934 under the Replacement Option Plans.<br>
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4.	Includes 791,617 under the Stock Option Plan and 286,223 under the Replacement Option Plans. No new<br>Replacement Options may be granted under the Replacement Option Plans and they will be terminated when all Replacement Options are exercised or expire.
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5.	At the special meeting of Shareholders held on January 19, 2021, the Shareholders approved an increase<br>of 1,000,000 Common shares to the maximum number of Common shares that may be issued on the exercise of Options under the Stock Option Plan.
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Annual Burn Rate

The following table summarizes the burn rate during the last three fiscal years. Burn rate is defined as the total number of Options granted during the applicable fiscal year divided by the weighted average number of Common shares and Class B Shares outstanding for the applicable fiscal year.

	Options Granted in Year	Net Burn Rate^1^	Burn Rate^2^	Weighted averagenumber of securitiesoutstanding
2022	124,566	0.1%	0.1%	94,173,000
2021	171,975	0.1%	0.2%	109,020,975
2020	157,685	0.2%	0.2%	68,671,747

Notes:

1.	Number of Options granted in a fiscal year, minus expired Options, divided by the weighted average number of<br>Common shares and Class B Shares outstanding for the applicable fiscal year.
2.	Number of Options granted divided by weighted average number of Common shares and Class B Shares<br>outstanding for the applicable fiscal year.
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Since the introduction in 2003 of the right of a holder to surrender an Option for a cash payment (the “Cash Value Alternative”) under the Stock Option Plan, as at the Record Date, 219,918 Options have been exercised for Common shares under the Stock Option Plan, resulting in a 0.26% dilution to Shareholders (as adjusted to reflect the Stock Dividend). During the financial year ended December 31, 2022, no Options were exercised for Common shares under the Stock Option Plan or under the Replacement Option Plans. See “Option Grants”. Of the 966,341 outstanding Options, 521,481 are exercisable and, of the outstanding Options, 780,200 Options were held by insiders, representing 0.9% of the total number of issued and outstanding Common shares and Class B Shares, in each case as of the Record Date.

A total of 124,566 Options were granted to officers or employees in 2022 representing 0.15% of the total number of issued and outstanding Common shares and Class B Shares as at the end of 2022, and a total of 137,115 Options were granted to officers or employees in February 2023, representing 0.16% of the total number of issued and outstanding Common shares and Class B Shares as of the Record Date.

Our Board has adopted a policy to manage the Stock Option Plan with a goal of limiting the potential dilution of outstanding and remaining authorized Options to 10% or less of the number of our outstanding Shares. The aggregate potential dilution of all issued and authorized Options under our Stock Option Plan was 2.0% at the Record Date and the aggregate potential dilution of all issued and authorized Options under our Stock Option Plan together with all outstanding Replacement Options under the Replacement Option Plans was, 2.1% at the Record Date.

Phantom Share Unit Plan

In 2010, the Board approved the Phantom Share Unit Plan, which is intended to supplement, in whole or in part, the granting of Options as long term incentives for officers and employees. This plan provides contingent future compensation based on Common share price performance but is payable only in cash and represents no potential for Shareholder dilution. The HR&C Committee and the Board believe that this Phantom Share Unit Plan, combined with other components of compensation, provides a broader range of alternatives in developing retention and performance incentives for officers and employees that more directly align their interests with those of current and future Shareholders.

The Phantom Share Unit Plan permits the Board to grant, as it determines appropriate, two types of units, RS Units and PS Units, which vest on the third anniversary of the grant date. A vested RS Unit must be redeemed by us by payment to the holder of an amount equal to the VWAP of a Common share over the 20 trading days immediately preceding its vesting date (the “Vesting DateValue”). A vested PS Unit must be redeemed by us by payment to the holder of an amount, determined by the Board, that is equal to or between nil and twice its Vesting Date Value based on two performance criteria measuring our performance relative to the performance of a peer group of companies over the three-year performance period. At the end of such period, in order to determine the amount to be paid on vested PS Units, the Company’s

performance is measured by reference to (i) the Company’s cumulative total Shareholder return (the “TSR”) relative to the TSR of the peer group, and (ii) the Company’s average annual return on capital employed (“ROCE”) relative to the ROCE of the peer group over the three-year performance period. The amount paid, if any, on such PS Units is based on an equal weighting of these two performance measurements, although if the ROCE is negative for the performance period, the weighting for that factor is capped at one half its potential maximum, regardless of relative performance. The peer group used for the purposes of the Phantom Share Unit Plan for PS Units granted prior to February 17, 2022 consists of Canfor Corporation, Interfor Corporation, Western Forest Products Inc. and Weyerhaeuser Company, all of which are North American publicly traded forest products companies. On the recommendation of the HR&C Committee, this peer group may be reviewed and changed by the Board, from time to time, as it deems appropriate. The Board also has discretion to vary the payout calculation as it considers appropriate to take into account factors that may have a significant or extraordinary effect on relative performance.

Officers and employees granted phantom share units under the Phantom Share Unit Plan are also entitled to additional phantom share units to reflect cash dividends paid on Common shares from the applicable grant date until payout. The final amount to be paid, in cash, to each officer or employee on RS Units and PS Units is based on the type and number of vested phantom share units they hold, multiplied by the applicable payout value. Other than officers or employees who retire, become totally disabled or die, phantom share units will be automatically cancelled, without payout, on termination of employment or resignation. In the event of retirement, total disability or death of a holder of RS Units or PS Units granted after 2012, the number of phantom share units held will be reduced based on the proportion of the three year period that the holder was not an officer or employee.

In February 2022, the Board made a number of amendments to the Phantom Share Unit Plan including (a) updating the peer group to remove Western Forest Products Inc. and add Resolute Forest Products Inc. and Louisiana – Pacific Corporation, (b) providing that for U.S. residents units may be issued and cash settled in U.S. dollars with the fair-market value on settlement referencing the VWAP on the NYSE, and (c) providing that cash value on settlement and value for dividend entitlements is to be determined using a single day VWAP as at the prior trading day. In February 2023, the Board further amended the peer group for grants after February 14, 2023 to remove Resolute Forest Products Inc. and add Potlach Deltic.

Beginning in 2020, the Board has granted only PS Units under the Phantom Share Unit Plan to executive officers and employees, and no RS Units have been granted. The change in 2020 in the mix of phantom share units granted was made to increase the award of performance-conditioned long-term incentives granted to executive officers and employees and reduce the award of time-conditioned incentives. As a result, since 2020, approximately 50% of the value of the long-term incentives granted to executive officers and employees (which in both cases consisted of only Options and PS Units) are performance-conditioned. See also “Clawback Policy”, which applies to the Phantom Share Unit Plan.

For PS Units which vested in February of 2023, the relative performance multiplier was 2.0. The calculation is set out below.

PS Unit Relative Performance Multiplier

First Comparison (out of a maximum of 1.00) – Return on Capital Employed (“ROCE”), annual average of calendar years, 2020, 2021 and 2022:

1.0 (exceeded four of four in peer group)

Second Comparison (out of a maximum of 1.00) – Total Shareholder Return (“TSR”), cumulative from January 1, 2020 to December 31, 2022:

1.0 (exceeded four of four in peer group)

Total 2.0

Previous PS Unit Relative Performance Multipliers were as follows:

For PS Units Vesting in February of:	Multiplier
2018	1.40
2019	1.92
2020	1.83
2021	1.83
2022	1.25

Norbord RSU Plan and DSU Plans

In addition, in connection with the Norbord Acquisition, the Company assumed Norbord’s obligations under the Norbord RSU Plan and the Norbord DSU Plans with respect to the Norbord RSUs held by Norbord Continuing Executives who are continuing and with respect to all outstanding Norbord DSUs.

Norbord RSUs held by Norbord Continuing Executives outstanding immediately prior to the closing of the Norbord Acquisition remained outstanding on their existing terms following completion, except that the number of such Norbord RSUs were adjusted by the Exchange Ratio and are to be paid out in reference to Common shares in accordance with the terms of the Norbord Acquisition. No new Norbord RSUs were issuable under the Norbord RSU Plan following completion of the Norbord Acquisition. As at February 4, 2023, all of the outstanding Norbord RSUs vested and, upon settlement the Norbord RSU Plan terminated.

All Norbord DSUs outstanding immediately prior to the closing of the Norbord Acquisition remained outstanding on their existing terms following the completion of the Norbord Acquisition, except that the number of such Norbord DSUs were adjusted by the Exchange Ratio and are to be paid out in reference to Common shares in accordance with the terms of the Norbord Acquisition. No new Norbord DSUs may be issued under the director Norbord DSU Plan following completion of the Norbord Acquisition. Both the management Norbord DSU Plan and the director Norbord DSU Plan will remain in place to administer Norbord DSUs outstanding thereunder until such time as all outstanding Norbord DSUs are settled, at which point the Norbord DSU Plans will be terminated.

In February 2022, the Board amended the Norbord RSU Plan and the Norbord DSU Plans to provide that cash value on settlement and value for dividend entitlements is to be determined using a single day VWAP as at the prior trading day.

Post-Retirement Pension Benefit

Most executive officers, including the CEO, are members of our non-contributory defined benefit pension plans for salaried employees. Certain executive officers are members of our defined contribution and 401K pension plans. The pension benefit provided under these pension plans is described under “Pension Plans” of this Circular. The Company does not provide any additional post-retirement benefits, such as medical or dental insurance, to the executive officers.

Clawback Policy

We have recognized a trend in recent years towards the adoption of recoupment and “clawback” policies, particularly among large public companies. As a prudent aspect of risk management and our commitment to operate consistently with good governance practices, the Board, in 2013, approved amendments to the Phantom Share Unit Plan and the Bonus Plan to incorporate payment adjustment provisions. These plans now both contain financial restatement triggers, permitting West Fraser to recoup the amount of the incentive awards that have been paid in excess of the amount that would have been payable under the restated financial statements, or deduct such excess amount from future payments to be made under such plans. These payment adjustment provisions also allow the Company to adjust incentive awards upwards to reflect restated financial statements that are more favourable than the original financial statements. The payment adjustment provisions have a three-year look-back period.

CEO’s Compensation

In recommending compensation for the CEO, the HR&C Committee follows similar principles to those applied for all of our other executive officers. The HR&C Committee considers market competitive salary information for chief executive officer positions in similar sized companies in Canada and the U.S. This includes manufacturing companies in other sectors as well as in the forest products sector. The Company periodically participates in broad based compensation surveys and also periodically seeks the advice of independent compensation consultants engaged to review the executive compensation program. In 2021, Towers Watson conducted a survey and review of our executive compensation program relative to those of different peer groups. The survey and review results, along with Company specific data, are used to determine the competitiveness of the CEO’s compensation and its alignment with the interests of Shareholders. The CEO establishes, with guidance and direction from the Board, annual goals and reports to the Board at the end of each year on his performance against those goals. The HR&C Committee considers this performance when considering its recommendation of compensation of the CEO.

Details of our CEO’s compensation are described in the table titled “Summary Compensation Table”.

Executive Equity Holding Requirements

In February 2013, our Board approved the adoption of minimum equity holding requirements, which were subsequently amended in September 2013. The minimum equity holding requirements are reviewed from time to time to align with what the Board considers best governance practices. In February 2019, on the recommendation of the HR&C Committee, the Board adopted a new equity holding requirements policy (the “Equity Holdings Requirements Policy”) to take into account changes to the Company’s equity compensation practices, which eliminated grants of RS Units and replaced them with grants of additional PS Units (which do not qualify as eligible equity under the Policy) to increase the award of performance-conditioned equity incentive components of executive compensation. As a result of these changes, beginning in 2020 approximately 50% of the value of the long-term incentives granted to executive officers (which consisted of only Options and PS Units) are performance-conditioned.

Under the Equity Holding Requirements Policy, each executive officer is required to hold Shares and RS Units having a value of not less than the executive’s base salary in the case of Senior Vice-Presidents and Vice-Presidents and not less than three times the executive’s base salary in the case of the CEO. Shares and RS Units held by an executive officer will be valued based on the greater of (1) their original cost or grant date value and (2) December 31 of the most recently completed financial year (or, if such date is not a trading date, on the last trading date of such year).

Initially, executive officers had until January 1, 2018, or if appointed after 2013, five years from the date of their appointment to meet the minimum equity holding requirements. In connection with changes to the long-term incentive components of executive compensation in February 2019, the Chief Executive Officer and Senior Vice-Presidents have five years from the later of the date of adoption of the new Equity Holding Requirements Policy in February 2019 and the date of such officer’s appointment to meet the minimum equity holding requirements, provided that officers who did not meet the requirements on such date must acquire not less than a pro-rata amount of equity each year to achieve full compliance by the end of such five year period. In connection with amendments to the Company’s Equity Holding Requirement Policy in September 2022, Vice-Presidents that are not Senior Vice-Presidents, were permitted to have eight years from the later of the date of adoption of the new Equity Holding Requirements Policy in February 2019 and the date of such officer’s appointment to meet the minimum equity holding requirements, provided that Vice-Presidents who did not meet the requirements on such date must acquire not less than a pro-rata amount of equity each year to achieve full compliance by the end of such eight year period.

For the purposes of the following disclosure, the following officers are each a “Named Executive Officer” of the Company:

Ray Ferris, President and CEO,
Chris Virostek, Senior Vice-President, Finance and CFO,
Sean McLaren, Chief Operating Officer,
Kevin Burke, Senior Vice-President, Wood Products, and
Robin Lampard, Senior Vice-President, Finance

The following table shows the total holdings of Shares and RS Units held by each Named Executive Officer as at December 31, 2022, valued based on the closing price on December 31, 2022 of $97.77:

Named Executive Officer Share and UnitHoldings

(December 31, 2022)

Named Executive Officer	Shareholdings	Value oftotalholdings^1^($)	Total asmultiple of2022 salary
Ray Ferris^2^<br>President and CEO	39,452	3,857,222	3.5
ChrisVirostek^2^ ** <br>Senior Vice-President, Finance and CFO **	5,512	538,908	1.0
SeanMcLaren^2^<br>Chief Operating Officer	10,238	1,000,969	1.7
Kevin Burke^2^Senior Vice-President, Wood Products	12,213	1,194,065	2.3
Robin Lampard^2 & 3^Senior Vice-President, Finance	10,141	991,486	2.0

Notes:

1.	Based on the Closing Price on December 31, 2022 of $97.77. Equity holdings and compliance under the<br>Equity Holding Requirements Policy are valued and assessed annually.
2.	Named Executive Officers also hold PS Units (exclusive of dividend entitlements) as follows: Mr. Ferris<br>– 41,900; Mr. Virostek – 11,300; Mr. McLaren – 8,715; Mr. Burke – 4,075; Ms. Lampard – 5,205 as of December 31, 2022.
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3.	In addition, Ms. Lampard also held an additional 6,792 Norbord RSUs, including all dividend entitlements<br>as of December 31, 2022.
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Independent Consultant

Compensation Advice

Towers Watson has provided consulting services to us for several years with respect to executive and nonexecutive compensation. In 2012, the HR&C Committee adopted a protocol under which all consulting services provided by Towers Watson related to executive compensation must be retained and authorized by the HR&C Committee. Towers Watson reports to the HR&C Committee as its outside compensation consultant to advise on compensation policies, including providing information on comparative levels of compensation for our senior executives and Directors. In 2021, Towers Watson conducted a survey and review of our executive compensation program relative to those of different peer groups and to assess market competitiveness of our executive compensation programs and provided advice on executive compensation.

Compensation Risk Assessment Advice

In 2022, the Company engaged Towers Watson to provide advice and to update its compensation risk assessment report to the HR&C Committee, The compensation risk assessment report concluded that there did not appear to be significant risks arising from the Company’s compensation policies and practices that were likely to have a material adverse effect on the Company. In its updated assessment and reports, Towers Watson also took into account and considered the limited compensation related risks within the Company, the involvement and authority of the Board in both compensation and risk management oversight, the presence of effective risk mitigating practices in the design of compensation programs and the changes to the long-term executive incentive compensation mix that place a greater emphasis on performance-conditioned long-term incentive grants.

Fees

The following table shows the fees paid to Towers Watson for services provided in the last two fiscal years:

Type of Work	2022	2021
Executive Compensation-Related Fees	$13,279	$81,415
All Other Fees^1^	$102,974	$6,825

Notes:

1.	All Other fees relate to fees paid for general industry compensation related services and surveys<br>
Submitted by the HR&C Committee:
---
Brian G. Kenning (Chair)
John N. Floren
Marian Lawson
Janice G. Rennie
Robert L. Phillips

Performance Graph

The following graph and table compare the total cumulative return to a Shareholder who invested $100 in our Common shares on December 31, 2017 with the cumulative total return of the S&P/TSX Composite Index and the S&P/TSX Paper & Forest Products Index for the same period.

LOGO

	2017	2018	2019	2020	2021	2022
West Fraser Timber Co. Ltd.^1, 2^	100	88	76	110	163	134
S&P/TSX Composite Index^1, 2^	100	91	112	118	148	139
S&P/TSX Paper & Forest Products Index^1, 2^	100	84	75	112	155	128

Notes:

1.	All returns are expressed on a total return basis (all cash and stock dividends reinvested in the index or<br>security).
2.	All information per Bloomberg.
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We consider the S&P/TSX Paper & Forest Products Index to be an appropriate comparative measure. This is a capitalization weighted index of leading forest products companies and includes Canfor Corporation, Interfor Corporation, Norbord (prior to the Norbord Acquisition), Stella-Jones Inc., Western Forest Products Inc., and West Fraser.

The following graph and table illustrates the relationship between the indexed TSR of our Common shares on the TSX from December 31, 2017 to the period ending December 31, 2022 considering a $100 investment versus total indexed direct compensation for the Company’s Named Executive Officers (2017 equals $100).

LOGO

	2017	2018	2019	2020	2021	2022
West Fraser Timber Co. Ltd.^1^	100	88	76	110	163	134
NEO total direct compensation^2^	100	98	70	90	129	128

Notes:

1.	All returns are expressed on a total return basis (all cash and stock dividends reinvested in the index or<br>security).
2.	Named Executive Officer direct compensation includes base salary, annual incentive (bonus) plan payments,<br>share-based and Option based awards measured using the Binomial valuation method.
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Executive Compensation

Total compensation for Named Executive Officers, as described in the Summary Compensation Table set out below, reflects a gradual recovery from the significant downturn in the forest products industry that began in 2006. Annual incentive bonuses for Named Executive Officers will be earned in those years where the Company achieves a ROSE in excess of the minimum threshold, with payment occurring in the following year. The minimum ROSE threshold was not met in 2015 and no annual incentive bonuses were earned by the senior executives, including the Named Executive Officers. In 2016, 2017 and 2018 the minimum ROSE threshold was exceeded and annual incentive bonuses were earned, with payment occurring in each of the following years. The minimum ROSE threshold was not met in 2019 and no annual incentive bonuses were earned by the senior executives, including the Named Executive Officers. In 2020, 2021 and 2022 the annual minimum ROSE threshold was exceeded and the maximum annual incentive bonuses were earned by the senior executives, including the Named Executive Officers, which were paid out in 2021, 2022 and 2023 respectively. See also “Annual Incentive Bonus Plan”.

The compensation of each of our Named Executive Officers for our three most recently completed financial years is set out below:

Summary Compensation Table

Name and<br> <br>principal<br><br><br>position	Year	Salary ($)	Share-basedawards^1^($)	Option-basedawards^2^($)	Non-equity incentive plan compensation ()	Pensionvalue^4^($)	All othercompensation^5^($)	Totalcompensation($)
					Annualincentiveplans3
Ray Ferris <br>President and CEO	2022<br> <br>2021<br><br><br>2020	1,113,750<br> <br>984,375<br><br><br>758,020	1,319,985<br> <br>1,151,505<br><br><br>834,895	1,320,009<br> <br>1,152,452<br><br><br>835,100	1,732,500<br>1,650,000 1,093,750	1,338,200<br> <br>2,702,300<br><br><br>653,100	Nil<br><br><br>Nil<br> <br>Nil	6,824,444<br> <br>7,640,632<br><br><br>4,174,865
Chris<br><br><br>Virostek<br> <br>Senior **<br><br><br>Vice- President,<br> <br>Finance and CFO **	2022<br> <br>2021<br><br><br>2020	540,000<br> <br>491,460<br><br><br>440,000	317,902<br> <br>287,677<br><br><br>260,935	318,098<br> <br>288,280<br><br><br>260,985	570,000<br>530,000 455,000	258,800<br> <br>428,000<br><br><br>257,700	Nil<br><br><br>Nil<br> <br>Nil	2,004,800<br> <br>2,025,417<br><br><br>1,674,620
Sean<br><br><br>McLaren^6^<br>Chief Operating<br><br><br>Officer	2022<br> <br>2021<br><br><br>2020	592,093<br> <br>508,713<br><br><br>468,304	270,057<br> <br>243,388<br><br><br>173,395	269,884<br> <br>242,516<br><br><br>173,345	611,611<br>563,400 478,559	402,500<br> <br>1,340,700<br><br><br>54,800	Nil<br><br><br>Nil<br> <br>Nil	2,146,145<br> <br>2,898,717<br><br><br>1,348,403
Kevin Burke^7^Senior<br>Vice-President,<br> <br>Wood Products	2022<br> <br>2021	528,979<br> <br>408,204	200,417<br> <br>174,761	199,440<br> <br>175,206	554,354<br>500,800	83,960<br> <br>66,272	Nil<br><br><br>Nil	1,567,150<br> <br>1,325,244
Robin Lampard^7^Senior Vice-President,<br>Finance	2022<br> <br>2021	486,250<br> <br>433,835	240,819<br> <br>234,610	241,158<br> <br>235,335	499,000<br>482,000	80,410<br> <br>26,360	Nil<br><br><br>Nil	1,547,637<br> <br>1,412,140

All values are in US Dollars.

Notes:

1.	For a description of the units see “Phantom Share Unit Plan”. Units are valued at the date of grant<br>using the Towers Watson Binomial method, which was the method used by the HR&C Committee when granting the units. This method was applied consistently in its competitive market analysis.
2.	Options have a term of ten years and vest as to 20% on each of the first through fifth anniversary dates of<br>the grant date. Each Option was valued using the Towers Watson Binomial method for the same reason as described in footnote 1. Whether the executive will receive value under these Options will depend on the future market price of Common shares. A<br>description of the current value of all Options held by each Named Executive Officer is set out in the charts under “Summary of Outstanding Options”.
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3.	Annual incentive (bonus) plan payments are included in the year earned and are paid in the following year.<br>
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4.	Pension values for Messrs. Ferris, Virostek, and McLaren represent the change in the defined benefit pension<br>liability related to the annual service cost, actual and assumed future compensation changes, including the impact of plan changes, if any. The defined benefit pension value is calculated based on the Company’s best estimate of future events<br>that affect pension liabilities, including assumptions about future salary adjustments and bonuses, and is reflected in the pension value for the Named Executive Officers. Defined benefit pension values will increase in those years where there has<br>been a significant salary increase. Defined benefit pension values will also be affected by changes in future compensation assumptions and in particular in those years where such assumptions have been updated following periodic reviews of the<br>underlying pension plans and their associated liabilities. Pension value for Ms. Lampard and Mr. Burke represents the Company’s basic
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and matching contributions under the defined contribution pension plan. Mr. Burke’s value has been<br>converted into Canadian dollars using the Bank of Canada’s average US/CDN exchange rate for the fiscal year (2022 = 1.3013; 2021 = 1.2520)
5.	Perquisites and other personal benefits that exceed the lesser of $50,000 and 10% of total compensation for<br>any of our Named Executive Officers.
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6.	Mr. McLaren was appointed as the Chief Operating Officer on December 7, 2021 and previously served<br>as President, Solid Wood. During the three-year period reported in the table above, Mr. McLaren’s salary and annual incentive compensation was awarded in U.S. dollars. The exchange rate used to convert this U.S. dollar compensation was the<br>Bank of Canada’s average US/CDN exchange rate for the fiscal year (2022 = 1.3013; 2021 = 1.2520; and 2020 = 1.3405;).
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7.	Ms. Lampard and Mr. Burke joined West Fraser on February 1, 2021 and were previously Senior<br>Vice-President and CFO and Senior Vice-President, North American Operations respectively, of Norbord until February 1, 2021. Ms. Lampard’s and Mr. Burke’s 2020 and January 2021 compensation was earned at Norbord and not<br>presented in the table Mr. Burke is paid in U.S. dollars. The exchange rate used to convert this U.S. dollar compensation was the Bank of Canada’s average US/CDN exchange rate for the fiscal year (2022 = 1.3013; 2021 = 1.2520)<br>
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Option Grants

Descriptionof West Fraser Stock Option Plan

Under the Stock Option Plan, the exercise price of an Option per Common share will not be less than the Closing Price on the last trading day before the Option is granted. The length of the term of Options will be fixed by the Board or the HR&C Committee at not more than ten years and, unless otherwise determined by the Board or the HR&C Committee, Options vest at the rate of 20% per year over the first five years of the term.

Under the Stock Option Plan, Options may not be exercised after a holder ceases to be an eligible participant, except that (a) an Option held on the death of an Option holder may be exercised by the personal representative of the holder during the period ending on the earlier of its expiry date and two years after the date of death, (b) an Option held on the retirement or total disability of an Option holder may be exercised during the period ending on the earlier of its expiry date and five years after the date of retirement or disability, and (c) a vested Option held in any other case may be exercised no later than the earlier of its expiry date and 30 days after the date the holder ceases to be an eligible participant. Options are not assignable, other than those that may be exercised by the personal representative of a deceased holder. We do not provide any financial assistance to holders of Options in connection with the exercise of Options.

The number of Common shares subject to an Option, the exercise price per Common share and the total number of Common shares that may be made subject to Options under the Stock Option Plan will be adjusted proportionately in the event of any subdivision or consolidation of Common shares or any dividend payable in Common shares and will be adjusted as determined by the Board in the event of certain other reorganizations or other events affecting the Common shares. Under the Stock Option Plan, Options granted that have not vested do not automatically vest on a change of control.

The Stock Option Plan permits outstanding vested Options to be surrendered by the holder to the Company in return for a cash payment under the Cash Value Alternative. The cash payment for a surrendered Option is equal to the amount by which the weighted average price per share at which the Common shares were traded on the TSX on the last trading day exceeds the exercise price per Common share applicable to the Option multiplied by the number of Common shares underlying the Option and the amount determined by the HR&C Committee as representative of the estimated costs avoided by the Option holder (such as trading commissions) by virtue of electing the Cash Value Alternative. Since implementation of the Cash Value Alternative in 2003, only 219,535 Common shares have been issued on the exercise of outstanding Options under the Stock Option Plan. Since February 1, 2021, an additional 73,452 Common shares have been issued on the exercise of outstanding Replacement Options. Our management believes that the Stock Option Plan, with the Cash Value Alternative, operates in a manner similar to the types of long-term incentive plans currently recommended by major institutional shareholder groups for public companies in North America.

The Stock Option Plan restricts the Option holdings of insiders. It provides that: (a) annual grants of Options to insiders may not be for a number of Common shares that exceeds 1% of the total number of our outstanding voting securities (the “Issued Shares”); (b) no single insider may hold, at any time, Options to acquire a number of Common shares that, together with all other Common shares issuable to the insider under any other equity compensation arrangements then in place (“Other Arrangements”), would exceed 5% of the Issued Shares; (c) the total number of Options held, at any time, by insiders cannot allow them to acquire a number of Common shares that, together with all other Common shares issuable to insiders under any Other Arrangements, would exceed 10% of the Issued Shares; and (d) the number of Common shares that may be acquired by all insiders during any 12-month period by exercising Options, together with all other Common shares issuable to insiders under any Other Arrangements, may not exceed 10% of the Issued Shares.

The Board has the power, without Shareholder approval, to amend, suspend, terminate or discontinue the Stock Option Plan, provided that doing so will not adversely alter or impair any Option without the written consent of the holder. This power includes the right to make appropriate adjustments to outstanding Options in the event of certain corporate transactions, to add provisions requiring forfeiture of Options in certain circumstances, to specify practices with respect to applicable tax withholdings, and to enhance clarity or correct ambiguous provisions in the Stock Option Plan. Notwithstanding this power, the Stock Option Plan provides that the Board may not, without Shareholder approval, amend the Stock Option Plan or an Option to: (i) increase the number of Common shares that may be issued; (ii) reduce the subscription price of an outstanding Option; (iii) extend the term of any Option beyond its expiry date or allow for an expiry date to be greater than ten years; (iv) allow non-permitted assignments or exercises of Options; (v) expand the persons entitled to participate in the Stock Option Plan; or (vi) provide for other types of equity based compensation.

In 2007, we obtained the approval of our Shareholders to make certain amendments to the Stock Option Plan which included, amending the amendment provision to specify the circumstances in which Shareholder approval is or is not required for an amendment to the Stock Option Plan. In 2008 and 2010, our Board made housekeeping amendments to the Stock Option Plan to (i) clarify provisions related to retirement, disability or death, and (ii) clarify provisions related to withholding taxes, respectively.

In 2016, we obtained approval of our Shareholders to amend the Stock Option Plan to increase by 750,000 the number of Common shares that may be issued under Options and to restrict other forms of amendment without Shareholder approval. At the special meeting of Shareholders held on January 19, 2021 to approve the Norbord Acquisition, the Shareholders approved a further increase of 1,000,000 Common shares to the maximum number of Common shares that may be issued on the exercise of Options under the Stock Option Plan.

On February 15, 2022, the Board amended the Stock Option Plan to provide that (a) cash value would be determined using the VWAP as at the trading day prior to the date of exercise; and (b) for Options granted to U.S. residents, Shares will be issued and cash settled in U.S. dollars with the fair market value on settlement referencing the VWAP on the NYSE.

A total of 124,566 Options were granted pursuant to the Stock Option Plan during the financial year ended December 31, 2022 and an additional 137,115 Options were granted pursuant to the Stock Option Plan in February of 2023.

In the financial year ended December 31, 2022, 351,448 outstanding Options and Replacement Options were surrendered for cash and no outstanding Options and Replacement Options were surrendered for Common shares, respectively, by the Named Executive Officers.

Description of Replacement Option Plans

In addition, the Company has adopted replacement option plans (the “Replacement Option Plans”) in connection with the Norbord Acquisition. These Replacement Option Plans exist solely to administer the Replacement Options, and no new Options may be granted thereunder following the completion of the Norbord Acquisition. The adoption of these plans did not require Shareholder approval under the policies of the TSX, as the aggregate number of Common shares issuable under them is less than 2% of the number of Common shares issued and outstanding prior to the Norbord Acquisition. Upon the exercise or expiry of all Replacement Options, the Replacement Option Plans will be terminated.

As at December 31, 2022, 112,934 Common shares were issuable on the exercise of Replacement Options. Of that total 111,911 Common shares are issuable under what was previously the Norbord stock option plan (plus an additional 1,023 options that are subject to the UK Option Sub-Plan), the principal terms of which are set out below.

The exercise price of the Replacement Options was determined by multiplying the exercise price of the Norbord Options by the Exchange Ratio. The Replacement Options generally have a 10-year term and continue to vest under their original terms, being at an annual rate of 20% per year beginning on the first anniversary of the date of grant.

Unless otherwise determined by the Board, an option will expire immediately in the event of resignation or termination of employment with cause, within 90 days of termination of employment without cause, within six months of the death of an option holder, and in accordance with its terms on retirement. Notwithstanding the foregoing, the outstanding Norbord Options held by certain option holders will immediately vest in the event such option holders are terminated without cause or constructively dismissed within 24 months of the completion of the Norbord Acquisition.

Certain of the Replacement Options are subject to a UK Option Sub-Plan, which provides for options up to £30,000 in value (based on grant price) to receive capital gains tax treatment for each UK option recipient. The UK Option Sub-Plan provides for the issuance of options under the more restricted terms required by HM Revenue and Customs (UK) to qualify the options for such treatment.

Shareholder approval is required in respect of any amendment to the Replacement Option Plans that would: (a) increase the maximum number of Common shares issuable under such plans (other than on a corporate reorganization); (b) reduce the exercise price of Replacement Options to less than the market price of the Common shares on the date of the option grant; (c) reduce the exercise price of Replacement Options; (d) extend the expiry date for the benefit of an insider; (e) increase the maximum number of Common shares issuable to insiders under the Replacement Option Plans; or (f) amend any of the foregoing limitations.

Summary of Outstanding Options

The Options granted to each of the Named Executive Officers during the financial year ended December 31, 2022 pursuant to the Stock Option Plan were as follows:

Option Grants During 2022

Name	Securities<br> <br>Under<br><br><br>Options<br><br><br>Granted(#)	%of Total Options<br> <br>Granted to Employees<br><br><br>in Financial<br><br><br>Year	Exercise or<br> <br>BasePrice<br> <br>($/Security)^1^	Market Value<br> <br>ofSecurities Underlying Options on the Date of Grant($/Security)^2^	Expiration<br><br><br>Date
Ray Ferris<br><br><br>President and CEO	28,857	23.2	123.63	3,567,591	February 18, 2032
Chris Virostek<br><br><br>Senior Vice-President, Finance<br><br><br>and CFO	6,954	5.6	123.63	859,723	February 18, 2032
Sean McLaren<br><br><br>Chief Operating Officer	5,900	4.7	US 97.32	728,932	February 18, 2032
Kevin Burke<br><br><br>Senior Vice-President, Wood<br><br><br>Products	4,360	3.5	US 97.32	538,668	February 18, 2032
Robin Lampard<br><br><br>Senior Vice-President, Finance	5,272	4.2	123.63	651,777	February 18, 2032

Notes:

1.	The Exercise Price for Messrs. Ferris, Virostek and Ms. Lampard is based on the TSX Closing Price and for<br>Messrs. McLaren and Burke is based on the NYSE Closing Price on February 17, 2022, being the FMV on the day prior to the grant date.
2.	The February 17, 2022 Bank of Canada exchange rate used to convert the market value of securities to US<br>dollars for Messrs. McLaren and Burke is US $1 = CDN $1.2695.
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The outstanding Options held by each Named Executive Officer that vested during the financial year ended December 31, 2022 were as follows:

Options and Replacement Options VestedDuring 2022

Name	Number of Options	Value ($)^1^
Ray Ferris<br><br><br>President and CEO	26,120	1,318,359
Chris Virostek<br><br><br>Senior Vice-President and CFO	10,270	481,122
Sean McLaren<br><br><br>Chief Operating Officer	7,755	406,695
Kevin Burke<br><br><br>Senior Vice-President, Wood Products	13,874	772,806
Robin Lampard<br><br><br>Senior Vice-President, Finance	22,334	1,277,900

Notes:

1.	Based on the Closing Price as at the date of vesting. No value is attributed to Options that have an exercise<br>price greater than the Closing Price at date of vesting.

The following tables provide particulars of Options and Replacement Options held by each of the Named Executive Officers as of the Record Date with current value based on the Closing Price of $102.50:

Ray Ferris

Option GrantDate	Exercisable	Non-Exercisable	Exercise<br> <br>Price($)	Current<br><br><br>Value ofExercisableOptions ($)	Current<br> <br>Value of<br><br><br>Non-<br><br><br>Exercisable<br> <br>Options($)	Expiry Date
February 23, 2015	12,385	Nil<br>	73.99	353,096<br>	Nil	February 23, 2025
February 15, 2016	22,435	Nil<br>	40.97	1,380,426<br>	Nil	February 15, 2026
February 20, 2017	17,225	Nil<br>	52.95	853,499<br>	Nil	February 20, 2027
February 16, 2018	10,340	Nil<br>	85.40	176,814<br>	Nil	February 16, 2028
February 15, 2019	19,120	4,780<br>	72.11	581,057<br>	145,264	February 15, 2029
February 14, 2020	26,781	17,854<br>	64.50	1,017,678<br>	678,452	February 14, 2030
February 17, 2021	13,800	20,700<br>	92.79	133,998<br>	200,997	February 17, 2031
February 18, 2022	5,772	23,085<br>	123.63	Nil<br>	Nil	February 18, 2032
February 17, 2023	Nil	31,666<br>	109.42	Nil<br>	Nil	February 17, 2033
Totals	127,858	98,085		4,496,567	1,024,713

Chris Virostek

Option GrantDate	Exercisable	Non-Exercisable	Exercise<br> <br>Price($)	Current<br><br><br>Value of<br><br><br>Exercisable<br> <br>Options($)	Current<br> <br>Value of<br><br><br>Non-<br><br><br>Exercisable<br> <br>Options($)	Expiry Date
April 3, 2017	1,500	Nil<br>	55.62	70,320<br>	Nil	April 3, 2027
February 16, 2018	7,565	Nil<br>	85.40	129,362<br>	Nil	February 16, 2028
February 15, 2019	7,764	1,941<br>	72.11	235,948<br>	58,987	February 15, 2029
February 14, 2020	8,370	5,580<br>	64.50	318,060<br>	212,040	February 14, 2030
February 17, 2021	3,452	5,178<br>	92.79	33,519<br>	50,278	February 17, 2031
February 18, 2022	1,392	5,562<br>	123.63	Nil<br>	Nil	February 18, 2032
February 17, 2023	Nil	7,814<br>	109.42	Nil<br>	Nil	February 17, 2033
Totals	30,043	26,075		787,208	321,305

Sean McLaren

Option GrantDate	Exercisable	Non-Exercisable	Exercise<br><br><br>Price ($)	Current<br><br><br>Value of<br><br><br>Exercisable<br> <br>Options($)	Current<br><br><br>Value of<br> <br>Non-<br> <br>Exercisable<br><br><br>Options ($)	Expiry Date
February 23, 2015	7,555	Nil	73.99	215,393	Nil	February 23, 2025
February 15, 2016	12,240	Nil<br>	40.97	753,127	Nil	February 15, 2026
February 20, 2017	9,400	Nil<br>	52.95	465,770	Nil	February 20, 2027
February 16, 2018	5,700	Nil<br>	85.40	97,470	Nil	February 16, 2028
February 15, 2019	5,716	1,429<br>	72.11	173,709	43,427	February 15, 2029
February 14, 2020	5,562	3,708<br>	64.50	211,356	140,904	February 14, 2030
February 17, 2021	2,904	4,356<br>	92.79	28,198	42,297	February 17, 2031
February 18, 2022	1,180	4,720<br>	US$97.32	Nil	Nil	February 18, 2032
February 17, 2023	Nil	6,444<br>	US$81.42	Nil	Nil	February 17, 2033
Totals	50,257	20,657		1,945,023	226,628

Kevin Burke

Option Grant Date	Exercisable	Non-Exercisable	Exercise<br> <br>Price($)	Current<br><br><br>Value ofExercisableOptions ($)	Current<br> <br>Value of<br><br><br>Non-<br><br><br>ExercisableOptions ($)	Expiry Date
February 10, 2017^1^	2,025	Nil	51.80	102,668	Nil	February 10, 2027
February 9, 2018^1^	5,400	Nil	68.67	182,682	Nil	February 9, 2028
November 12, 2018^1^	4,050	4,050	54.17	195,737	195,737	November 12, 2028
November 11, 2019^1^	4,050	8,100	56.00	188,325	376,650	November 11, 2029
February 17, 2021	2,098	3,147	92.79	20,372	30,557	February 17, 2031
February 18, 2022	872	3,488	US$97.32	Nil	Nil	February 18, 2032
February 17, 2023	Nil	4,867	US$81.42	Nil	Nil	February 17, 2033
Totals	18,495	23,652		689,783	602,944

Notes:

1.	Option Grant Date reflected represents the original grant date of the Norbord Options. The Replacement Options<br>were issued under the Replacement Option Plans, which were adopted by the Company on closing of the Norbord Acquisition.

Robin Lampard

Option Grant Date	Exercisable	Non-Exercisable	Exercise<br> <br>Price($)	Current Value ofExercisableOptions ($)	Current<br> <br>Value of Non-<br> <br>ExercisableOptions ($)	Expiry Date
February 9, 2018^1^	4,050	Nil	68.67	137,012	Nil	February 9, 2028
November 12, 2018^1^	Nil	6,750	54.17	Nil	326,228	November 12, 2028
November 11, 2019^1^	Nil	10,800	56.00	Nil	502,200	November 11, 2029
February 17, 2021	1,409	4,227	92.79	13,681	41,044	February 17, 2031
February 18, 2022	1,055	4,217	123.63	Nil	Nil	February 18, 2032
February 17, 2023	Nil	5,701	109.42	Nil	Nil	February 17, 2033
Totals	6,514	31,695		150,693	869,472

Notes:

1.	Option Grant Date reflected represents the original grant date of the Norbord Options. The Replacement Options<br>were issued under the Replacement Option Plans, which were adopted by the Company on closing of the Norbord Acquisition.

RS Unitsand PS Units

Beginning in 2010, our Board has approved annual grants of RS Units and PS Units (collectively, “Units”) to Named Executive Officers and other employees pursuant to the Phantom Share Unit Plan. The Phantom Share Unit Plan and Units are described in the Report on Executive Compensation under the heading “Phantom Share Unit Plan”.

The Units granted to each of the Named Executive Officers during the financial year ended December 31, 2022 were as follows:

Equity Based Grants During 2022

Name	Number of<br> <br>Units Granted^1^<br> <br>PSUs^2^	% of Total UnitsGrantedtoEmployees in theCurrent Year<br> <br>PSUs	Aggregate<br> <br>Market ValueofUnits on Date ofGrant ($)<br> <br>PSUs^3^	Aggregate MarketValue of Units atDecember 31, 2022($)<br><br><br>PSUs^4^
RayFerris<br> <br>President and CEO	12,415	22.8	1,534,866	1,213,815
ChrisVirostek<br> <br>Senior Vice-President and<br><br><br>CFO	2,990	5.5	369,654	292,332
SeanMcLaren<br> <br>Chief Operating Officer	2,540	4.7	314,020	248,336
KevinBurke<br> <br>Senior Vice-President,<br><br><br>Wood Products	1,885	3.5	233,043	184,296
RobinLampard<br> <br>Senior Vice-President,<br><br><br>Finance	2,265	4.2	280,022	221,449

Notes:

1.	No RS Units were issued during 2022.
2.	PS Units.
---	---
3.	Based on the Closing Price of $123.63 on the date prior to February 18, 2022.
---	---
4.	Based on the Closing Price of $97.77 on December 31, 2022.
---	---

The following table provides particulars of Units held by each of the Named Executive Officers as of December 31, 2022:

	Vesting 2023^1^	Vesting 2024^1^	Vesting 2025^1^	Value asatDecember 31, 2022^2^($)
Name	PSUs	PSUs	PSUs	PSUs
Ray Ferris<br><br><br>President and CEO	15,055	14,430	12,415	4,096,563
Chris Virostek<br><br><br>Senior Vice-President and CFO	4,705	3,605	2,990	1,104,801
SeanMcLaren<br> <br>Chief Operating Officer	3,125	3,050	2,540	852,066
KevinBurke<br> <br>Senior Vice-President, Wood Products	Nil	2,190	1,885	398,413
Robin Lampard<br><br><br>Senior Vice-President, Finance	6,792^3^	2,940	2,265	1,172,929

Notes:

1.	Does not include PSUs to be credited under the Phantom Share Unit Plan as a result of dividends on the Common<br>shares.
2.	Based on the Closing Price of $97.77 on December 31, 2022. No RS Units of the Company were issued for these<br>years.
---	---
3.	This amount represents Norbord RSUs, including all dividend entitlements as of December 31, 2022, that<br>vested on February 4, 2023, having an aggregate value as of December 31, 2022 of $664,054.
---	---

The Units held by each of the Named Executive Officers that vested during the financial year ended December 31, 2022 were as follows:

Equity-Based Awards Vested During 2022

	Number of unitsvested		Value paid()
Name	RSUs	PSUs^1^	RSUs2
RayFerris<br> <br>President and CEO	Nil	9,541	Nil
ChrisVirostek<br> <br>Senior Vice-President and CFO	Nil	3,876	Nil
SeanMcLaren<br> <br>Chief Operating Officer	Nil	2,851	Nil
KevinBurke<br> <br>Senior Vice-President, Wood Products	Nil	Nil	Nil
RobinLampard<br> <br>Senior Vice-President, Finance	6,717	Nil	821,623

All values are in US Dollars.

Notes:

1.	PS Units granted during 2019 plus additional Units credited under the Phantom Share Unit Plan as a result of<br>dividends on the Common shares and rounded for presentation to the nearest whole number of PS Units.
2.	Represents Norbord RSUs which vested on February 4, 2022 at a price of $122.32 per unit.<br>
---	---
3.	The value paid in 2022 was based on $118.839 per unit for PS Units and a performance multiplier of 1.25 for PS<br>Units. Numbers may not add up due to rounding.
---	---

Pension Plans

The majority of our fulltime salaried employees are covered by non-contributory defined benefit pension plans.

For those salaried employees whose employment began before 2016, the plans provide a pension equal to 2% of the highest average compensation (which includes base salary and bonuses) of the employee for any consecutive 60-month period in that employee’s final 10 years with us, multiplied by the number of years of credited service with us. Normal retirement is at age 65. In accordance with applicable tax legislation, these plans allow for additional years of credited service until a continuing employee reaches age 71. Each of these pension plans allows for early retirement at age 55 with a minimum service requirement of two years. Benefits provided for early retirement are reduced by 4% per year for retirement between the ages of 55 and 57 and by 3% per year for retirement between the ages of 58 and 59. No reduction is made for retirement between the ages of 60 and 64.

On January 1, 2016, we introduced a new non-contributory defined benefit pension plan for salaried employees whose employment begins on or after that date. Changes from the existing plans include a pension based on the employee’s average annual salary over the final 10 years with us, as well as the elimination of early retirement benefits so that full pension benefits are only achieved on retirement at age 65 or over. In accordance with applicable tax legislation, this new plan also allows for additional years of credited service until a continuing employee reaches age 71.

On January 1, 2022 the Canadian salaried defined benefit pension plans closed to new entrants. New salaried employees are enrolled in a defined contribution pension plan with an 8% employer contribution along with 100% matching contributions for the first 3% of employee contributions. At the same time in the US, the 401(k) plan for salaried lumber employees, OSB corporate employees and non-union hourly

employees will provide a 3% non-elective retirement contribution, along with 100% matching employer contributions on the first 5% an employee contributes to the plan.

Defined Benefit Pension Plans

The estimated annual pension payable upon retirement under the defined benefit pension plans, assuming employment began before 2016, no reduction for early retirement and based on the standard form life annuity for a minimum of 60 months with no joint survivor pension, is as follows:

Estimated Annual Benefits Payable upon Retirement

Annual Compensation	Years of Service
	15 Years	20 Years	25 Years	30 Years
$400,000	$120,000	$160,000	$200,000	$240,000
$500,000	$150,000	$200,000	$250,000	$300,000
$600,000	$180,000	$240,000	$300,000	$360,000
$700,000	$210,000	$280,000	$350,000	$420,000
$800,000	$240,000	$320,000	$400,000	$480,000
$900,000	$270,000	$360,000	$450,000	$540,000
$1,000,000	$300,000	$400,000	$500,000	$600,000
$1,100,000	$330,000	$440,000	$550,000	$660,000
$1,200,000	$360,000	$480,000	$600,000	$720,000
$1,300,000	$390,000	$520,000	$650,000	$780,000
$1,400,000	$420,000	$560,000	$700,000	$840,000
$1,500,000	$450,000	$600,000	$750,000	$900,000

Compensation for the purposes of the pension plans, based on employment beginning before 2016, is defined as the average annual compensation, including salary and bonus, of the highest consecutive 60 -month period in the last 10 years’ service with the Company.

The benefits listed in the table are not subject to any deduction for Canada Pension Plan or other offset amounts.

The table below sets forth the accumulated defined benefit under our pension plans for four of the Named Executive Officers as at December 31, 2022.

Name	Numberof yearscreditedservice(#)	Annual benefitspayable1()	Openingpresent valueofdefinedbenefitobligation^2^($)	Compensatorychange^3^^^($)	Non-compensatorychange^4^($)	Closingpresentvalue ofdefinedbenefitobligation^2^^^($)
		At year<br>end
Ray Ferris<br> <br>President and CEO	21.3	691,200	11,230,400	1,338,200	(2,156,800)	10,411,800
Chris Virostek<br><br><br>Senior Vice-President and CFO	5.7	86,000	1,396,200	258,800	(821,200)	833,800
Sean McLaren<br> <br>Chief Operating<br><br><br>Officer	34.5	457,400	7,623,000	402,500	(2,311,200)	5,714,300
Kevin Burke Senior Vice-President,<br><br><br>Wood Products	Nil	Nil	Nil	Nil	Nil	Nil
Robin Lampard<br><br><br>Senior Vice-President,<br><br><br>Finance	9.75	43,645	605,671	Nil	(163,810)	441,860

All values are in US Dollars.

Notes:

1.	Represents the estimated annual pension, excluding any employee paid ancillary benefits, where applicable,<br>that would be received by the Named Executive Officer upon retirement at age 65 based on actual pensionable earnings at December 31, 2021. The annual pension payable at year end is based on actual credited service at December 31, 2022. The<br>annual pension at age 65 is based on credited service projected to age 65. In accordance with applicable tax legislation, our pension plans allow for additional years of credited service until a continuing employee reaches age 71.<br>
2.	The present value is the estimated value of the pension obligation to the date indicated using the actuarial<br>assumptions and methods that are consistent with those used in determining pension liabilities as disclosed in the consolidated financial statements.
---	---
3.	Compensatory change represents the change in the pension liability related to the annual service cost, actual<br>and assumed future compensation changes and the impact of plan changes, if any. The pension value is calculated based on the Company’s best estimate of future events that affect pension liabilities, including assumptions about future salary<br>adjustments and bonuses, and is reflected in the pension value for the Named Executive Officers. Pension values will increase in those years where there has been a significant salary increase. Pension values will also be affected by changes in<br>future compensation assumptions and in particular in those years where such assumptions have been updated following periodic reviews of the underlying pension plans and their associated liabilities.
---	---
4.	Non compensatory change includes items such as interest on the obligation and the impact of changes in the<br>discount rate assumption.
---	---

The estimated years of credited service under the defined benefit pension plans at the normal retirement age of 65 for each Named Executive Officer is set out below. We have not granted on a discretionary basis any additional years of credited service to our Named Executive Officers in excess of their actual years of service.

Name	Estimated Years of Credited Service
Ray Ferris<br><br><br>President and CEO	26
Chris Virostek<br><br><br>Senior Vice-President and CFO	21
Sean McLaren<br><br><br>Chief Operating Officer	45
Kevin Burke<br><br><br>Senior Vice-President, Wood Products	Not applicable^1^
Robin Lampard<br><br><br>Senior Vice-President, Finance	10^2^

Note:

1.	Mr. Burke is not a member of a defined benefit pension plan.
2.	The years of credited service for Ms. Lampard reflect her accrued services in the defined benefit pension<br>plan for Norbord. Ms. Lampard ceased participating in the Norbord defined benefit pension plan effective January 1, 2006 and her service in that plan is frozen at 10 years.
---	---

Defined Contribution Pension Plans

The following table shows the value of investments held by the NEOs participating in the Company’s defined contribution pension plans:

Name	Accumulated Value at<br><br><br>December 31, 2021 ($)	Total CompensatoryChange ($)^1^	Accumulated Value at<br><br><br>December. 31, 2022 ($)
Robin Lampard^2^<br><br><br>Senior Vice-President,<br><br><br>Finance	1,350,149	80,410	1,231,471
Kevin Burke^3^<br><br><br>Senior Vice-President, Wood<br><br><br>Products	1,704,775	83,960	1,607,341

Notes:

1.	These amounts represent employer contributions to the Company’s defined contribution pension plans.<br>
2.	Ms. Lampard, as a member accruing benefits under the defined contribution pension plan, is no longer<br>eligible to contribute to the flex component of the defined benefit pension plan but has outstanding balances from her participation prior to 2006 that are included in the table.
---	---
3.	Mr. Burke’s accumulated values and compensatory change have been converted to Canadian dollars. The<br>exchange rate used to convert this U.S. dollar compensation was the Bank of Canada’s average US/CDN exchange rate for the fiscal year (2022 = 1.3013). The accumulated values shown include Mr. Burke’s personal salary and bonus<br>allocation equivalent to $26,676 Canadian into a deferred compensation plan.
---	---

Severance and Change of Control Agreements

On November 9, 2020, Norbord entered into a letter agreement with Ms. Lampard, providing for severance entitlements in the event that (i) Norbord (or its successor) or any of its affiliates terminated their employment on a without cause basis or such individual resigns in circumstances constituting constructive dismissal within 24 months following the Norbord Acquisition or other change of control transaction, or (ii) in connection with the consummation of the Norbord Acquisition or other change of control transaction, Norbord (or its successor) or any of its affiliates does not offer such individual a comparable position. Upon such event, the individual is entitled to receive an amount equal to the product of (a) one month per full year of employment with Norbord, and (b) the sum of (i) 1/12th of the individual’s base salary at the rate in effect on the termination date, and (ii) 1/12th the average of the individual’s annual bonus earned in respect of the three most recently completed years prior to the termination date, less all applicable taxes, deductions and withholdings; provided that (a) is no less than 12 months or greater than 24 months. In addition, on November 9, 2020, Norbord entered into a letter agreement with Ms. Lampard, providing that

in the event that Norbord (or its successor) or any of its affiliates terminated their employment on a without cause basis or such individual resigns in circumstances constituting constructive dismissal within 24 months following the Norbord Acquisition or other change of control transaction, all the Replacement Options held by them would immediately vest and would be exercisable for 12 months after the termination date and all the Norbord RSUs held by them would also immediately vest and be settled within 30 days following the termination date. The Norbord Acquisition constituted a change of control of Norbord for the purposes of these agreements. On January 18, 2023, the Company and Ms. Lampard agreed to a one-year extension of the foregoing agreements.

Other than as described above and pension and retirement benefits described elsewhere in this Circular, the Company does not have any agreements with its Named Executive Officers that provide for payments following or in connection with any termination (whether voluntary, involuntary or constructive) or a change in control of the Company.

Directors’ Compensation and Holdings

For a description of retainers and fees payable to Directors, actual compensation paid during 2022 and securities held by Directors, see “Information regarding Nominees for Election as Directors - Director Compensation”.

Interest of Informed Persons in Material Transactions

No informed person of the Company (which includes our Directors and officers and persons who own or control securities carrying 10% or more of the voting rights attached to all of our voting securities) or any associate or affiliate of any informed person has had a material interest in any transaction since the commencement of the Company’s most recently completed financial year or has a material interest in any proposed transaction which has materially affected or would affect the Company or any of its subsidiaries.

Indebtedness of Directors, Officers and Employees

The following table sets out the aggregate indebtedness outstanding to us from our employees and former employees as at the Record Date. We do not make loans to our Directors or officers. During 2022, no loans were outstanding to persons who were Directors or officers during 2022 or to any of our former Directors or officers, or their associates.

AGGREGATE INDEBTEDNESS
Purpose	To the Company or itsSubsidiaries	To Another Entity
Share purchases	Nil	Nil
Employee loans	US$324,941	Nil

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information with respect to securities authorized for issuance under equity compensation plans that permit issuance from treasury as at December 31, 2022.

	Number of securities tobe issued upon exerciseof outstanding Options,warrants and rights	Weighted averageexercise price ofoutstanding Options,warrants and rights	Number of securitiesremaining available forfuture issuance underequitycompensationplans (excludingsecurities reflected incolumn (a))
Plan Category	(a)	(b)	(c)
Equity compensation plans approved by Shareholders	728,371	$79.23	910,424
Equity compensation plans not approved by Shareholders^1^	112,934	$56.57	Nil
Total	841,305	$76.19	910,424

Notes:

1.	In connection with the Norbord Acquisition, the Company adopted the Replacement Option Plans, pursuant to<br>which the Company has issued Replacement Options. Upon the exercise or expiry of all such Replacement Options, the Replacement Option Plans will be terminated.

ADDITIONAL INFORMATION

Additional information (including financial information) relating to us can be found in our Annual Report, which includes our audited financial statements for the years ended December 31, 2022 and 2021 and the accompanying audit report and management’s discussion and analysis and in our Annual Information Form. The Annual Report and Annual Information Form are on our website at www.westfraser.com and can also be found on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml. Copies of the Annual Report and the relevant portion of any documents incorporated by reference in the Annual Report, the Annual Information Form, as well as additional copies of this Circular, may be obtained upon request to Robert B. Winslow, CFA, Director, Investor Relations & Corporate Development, 858 West Georgia Street, Suite 1500, Vancouver, B.C., V6C 3E8 or by emailing to [email protected].

DATED at Vancouver, B.C., March 9, 2023.

BY ORDER OF THE BOARD
Raymond Ferris
President and Chief Executive Officer

SCHEDULE “A”

SHAREHOLDER RIGHTS PLAN

AGREEMENT

DATED AS OF

APRIL 9, 2020

AND

AS AMENDED ANDRESTATED

AS OF APRIL 18, 2023

BETWEEN

WEST FRASERTIMBER CO. LTD.

AND

COMPUTERSHARE INVESTOR SERVICES INC.

AS RIGHTS AGENT

TABLE OF CONTENTS

Article 1 INTERPRETATION		1
1.1	Certain Definitions	1
1.2	Currency	16
1.3	Headings	16
1.4	Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares	17
1.5	Acting Jointly or in Concert	17
Article 2 RIGHTS		17
2.1	Legend on Share Certificates	17
2.2	Initial Exercise Price; Exercise of Rights; Detachment of Rights	18
2.3	Adjustments to Exercise Price; Number of Rights	21
2.4	Date on Which Exercise Is Effective	26
2.5	Execution, Authentication, Delivery and Dating of Rights Certificates	26
2.6	Registration, Transfer and Exchange	26
2.7	Mutilated, Destroyed, Lost and Stolen Rights Certificates	27
2.8	Persons Deemed Owners of Rights	28
2.9	Delivery and Cancellation of Certificates	28
2.10	Agreement of Rights Holders	28
2.11	Rights Certificate Holder Not Deemed a Shareholder	29
Article 3 ADJUSTMENTS TO THE RIGHTS IN THE EVENTOF CERTAIN TRANSACTIONS		29
3.1	Flip-in Event	29
Article 4 THE RIGHTS AGENT		32
4.1	General	32
4.2	Merger, Amalgamation or Consolidation or Change of Name of Rights Agent	33
4.3	Duties of Rights Agent	33
4.4	Change of Rights Agent	35
4.5	Compliance with Anti-Money Laundering Legislation	35
4.6	Privacy Legislation	36
4.7	Liability	36
Article 5 MISCELLANEOUS		36
5.1	Redemption and Waiver	36
5.2	Expiration	38
5.3	Issuance of New Rights Certificates	38
5.4	Supplements and Amendments	38
5.5	Fractional Rights and Fractional Shares	40
5.6	Rights of Action	40
5.7	Regulatory Approvals	41
5.8	Declaration as to Foreign Holders	41
5.9	Notices	41
5.10	Costs of Enforcement	42
5.11	Successors	42
5.12	Benefits of this Agreement	42
5.13	Governing Law	42
5.14	Severability	43

ii -

5.15	Effective Date	43
5.16	Determinations and Actions by the Board of Directors	43
5.17	Fiduciary Duties of Directors	43
5.18	Time of the Essence	44
5.19	Execution in Counterparts	44

SHAREHOLDER RIGHTS PLAN AGREEMENT

SHAREHOLDER RIGHTS PLAN AGREEMENT dated as of April 18, 2023 between West Fraser Timber Co. Ltd. (“WestFraser” or the “Corporation”) a company incorporated under the laws of British Columbia and Computershare Investor Services Inc., a company governed under the laws of Canada (the “Rights Agent”), which was appointed successor to TSX Trust Company (formerly, AST Trust Company (Canada)), a trust company incorporated under the laws of Canada;

WHEREAS the board of directors of West Fraser has determined that it is advisable and in the best interest of the Corporation to amend and restate this shareholder rights plan to take effect on April 18, 2023, to ensure, to the extent possible, that all shareholders of West Fraser are treated fairly in connection with any take-over bid for West Fraser;

AND WHEREAS in order to implement the adoption of a shareholder rights plan as established by this Agreement, the board of directors of West Fraser:

(a)	authorized the issuance, effective at the Record Time (as hereinafter defined), of one Right (as hereinafter<br>defined) in respect of each Voting Share (as hereinafter defined) outstanding at the Record Time; and
(b)	authorized the issuance of one Right in respect of each Voting Share issued after the Record Time and prior<br>to the earlier of the Separation Time (as hereinafter defined) and the Expiration Time (as hereinafter defined);
---	---

AND WHEREAS each Right entitles the holder thereof, after the Separation Time, to purchase securities of West Fraser pursuant to the terms and subject to the conditions set forth in this Agreement;

AND WHEREAS West Fraser desires to appoint the Rights Agent to act on behalf of West Fraser and the holders of Rights, and the Rights Agent is willing to so act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates (as hereinafter defined), the exercise of Rights and other matters referred to in this Agreement;

AND WHEREAS this agreement was originally entered into by the Company and TSX Trust Company (formerly, AST Trust Company (Canada)) as of April 9, 2020 and is hereby further amended and restated as provided herein;

NOW THEREFORE, in consideration of the premises and the respective covenants and agreements set forth herein, and subject to such covenants and agreements, the parties hereby agree as follows:

ARTICLE 1

INTERPRETATION

1.1	Certain Definitions

For purposes of this Agreement, the following terms have the meanings indicated:

(a)	“Acquiring Person” means any Person who is the Beneficial owner of 20% or more of the<br>outstanding Voting Shares; provided, however, that the term “Acquiring Person” shall not include:

(i)	West Fraser or any Subsidiary of West Fraser;
(ii)	any Person who becomes the Beneficial owner of 20% or more of the outstanding Voting Shares as a result of<br>one or any combination of:
---	---
(A)	an acquisition or redemption by West Fraser of Voting Shares which, by reducing the number of Voting Shares<br>outstanding, increases the proportionate number of Voting Shares Beneficially owned by such Person to 20% or more of the Voting Shares then outstanding,
---	---
(B)	a Permitted Bid Acquisition,
---	---
(C)	a Pro Rata Acquisition,
---	---
(D)	an Exempt Acquisition, or
---	---
(E)	a Convertible Security Acquisition;
---	---

provided, however, that if a Person becomes the Beneficial owner of 20% or more of the outstanding Voting Shares by reason of one or any combination of the operation of Paragraphs (A), (B), (C), (D) or (E) above and such Person thereafter becomes the Beneficial owner of more than an additional 1% of the number of outstanding Voting Shares (other than pursuant to one or more of any combination of Paragraphs (A), (B), (C) , (D) or (E) above, as the case may be), then as of the date such Person becomes the Beneficial owner of such additional Voting Shares, as the case may be, such Person shall become an “Acquiring Person”;

(iii)	for a period of 10 calendar days after the Disqualification Date (as defined below), any Person who becomes<br>the Beneficial owner of 20% or more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on Section 1.1(h)(iv)(B) solely because such Person is making or has announced a current intention to make a<br>Take-over Bid, either alone, through such Person’s Affiliates or Associates or by acting jointly or in concert with any other Person. For the purposes of this definition, “Disqualification Date” means the first date of a public<br>announcement of facts indicating that any Person is making or has announced a current intention to make a Take-over Bid, either alone, through such Person’s Affiliates or Associates or by acting jointly or in concert with any other Person<br>(which, for the purposes of this definition, shall include, without limitation a report asserting such facts filed pursuant to NI 62-103, NI 62-104, Section 13(d)<br>of the U.S. Exchange Act or any other applicable securities laws, as amended from time to time and any provision substituted therefor);
(iv)	an underwriter or member of a banking or selling group acting in such capacity that acquires 20% or more of<br>the outstanding Common Shares from West Fraser in connection with a distribution of securities of West Fraser; or
---	---
(v)	a Person (a “Grandfathered Person”) who is the Beneficial owner of 20% or more of the<br>outstanding Voting Shares determined as at the Record Time, provided however, that this exception shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person<br>
---	---

shall, after the Record Time: (1) cease to own 20% or more of the outstanding Voting Shares, or<br>(2) become the Beneficial owner of any additional Voting Shares that increases its Beneficial ownership of Voting Shares by more than 1% of the number of Voting Shares outstanding as at the Record Time, other than through an acquisition<br>pursuant to which a Person becomes a Beneficial owner of additional Voting Shares by reason of one or any combination of the operation of Paragraphs 1.1(a)(ii)(A), (B), (C), (D) or (E).
(b)	“Adjusted Exercise Price” means the price at which a holder may purchase the securities<br>issuable upon exercise of Rights pursuant to the terms of Section 3.1(a)(ii) which, until adjustment thereof in accordance with the terms hereof, shall be equal to the Exercise Price multiplied by a fraction in which:
---	---
(i)	the numerator is the number of Common Shares per Right that may be purchased pursuant to<br>Section 3.1(a)(ii); and
---	---
(ii)	the denominator is the number of Common Shares per Right that could have been purchased pursuant to<br>Section 3.1(a) in the event that there had been sufficient authorized but unissued Common Shares to permit each holder of a Right (other than an Acquiring Person or a transferee of the kind described in Section 3.1(b)(ii)) to purchase the<br>number of Common Shares to which they would have been entitled under Section 3.1(a)(i);
---	---
(c)	“Adjustment Factor” shall mean a fraction in which:
---	---
(i)	the numerator is equal to West Fraser’s authorized but unissued Voting Shares; and<br>
---	---
(ii)	the denominator is equal to West Fraser’s issued and outstanding Voting Shares minus those Voting<br>Shares that the Acquiring Person Beneficially owns;
---	---
(d)	“Affiliate”, when used to indicate a relationship with a specified Person, means a Person<br>that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such a specified Person;
---	---
(e)	“Agreement” means this shareholder rights plan agreement dated April 9, 2020 and as<br>amended and restated April 18, 2023, as amended, modified or supplemented from time to time; “hereof”, “herein”, “hereto” and similar expressions mean and refer to this Agreement as a whole and not to any<br>particular part of this Agreement;
---	---
(f)	“Annual Cash Dividend” means cash dividends paid in any fiscal year of West Fraser, to the<br>extent that such cash dividends do not exceed in the aggregate, the greatest of:
---	---
(i)	200% of the aggregate amount of cash dividends declared payable by West Fraser on its Common Shares in its<br>immediately preceding fiscal year;
---	---
(ii)	300% of the arithmetic mean of the aggregate amounts of the annual cash dividends declared payable by West<br>Fraser on its Common Shares in its three immediately preceding fiscal years; and
---	---

(iii)	100% of the aggregate consolidated net income of West Fraser, before extraordinary items, for its<br>immediately preceding fiscal year;
(g)	“Associate” when used to indicate a relationship with a specified Person, means any<br>relative of such specified Person who has the same home as such specified Person, or any Person to whom such specified Person is married or with whom such specified Person is living in a conjugal relationship outside marriage, or any relative of<br>such spouse or other Person who has the same home as such specified Person;
---	---
(h)	A Person shall be deemed the “Beneficial owner” of, and to have “Beneficialownership” of, and to “Beneficially own”,
---	---
(i)	any securities of which such Person or any of such Person’s Affiliates or Associates is the owner at<br>law or in equity;
---	---
(ii)	any securities of which such Person or any of such Person’s Affiliates or Associates has, directly or<br>indirectly, the right to become the owner at law or in equity (provided that such right is exercisable within a period of 60 days, whether or not on condition or the happening of any contingency or the making of any payment) pursuant to any<br>agreement, arrangement, pledge or understanding, whether or not in writing (other than customary agreements with and between underwriters and/or banking group members and/or selling group members with respect to a distribution of securities and<br>other than pledges of securities in the ordinary course of business), or upon the exercise, conversion or exchange of any Convertible Security (other than the Rights);
---	---
(iii)	any securities which are subject to a lock-up or similar agreement<br>to tender or deposit them into any Take-over Bid made by such Person or made by any Affiliate or Associate of such Person or made by any other Person acting jointly or in concert with such Person; and
---	---
(iv)	any securities which are Beneficially owned within the meaning of Sections 1.1(h)(i), (ii) or (iii) by<br>any other Person with whom such Person is acting jointly or in concert;
---	---

provided, however, that a Person shall not be deemed the “Beneficial owner” of, or to have “Beneficial ownership” of, or to “Beneficially own”, any security as a result of the existence of any one or more of the following circumstances:

(A)	such security has been agreed to be deposited or tendered pursuant to a<br>Lock-up Agreement or is otherwise deposited or tendered pursuant to any Take-over Bid made by such Person, made by any of such Person’s Affiliates or Associates or made by any other Person referred to in<br>Section 1.1(h)(iv), unless such deposited or tendered security has been taken up or paid for, whichever shall occur first;
(B)	such Person, any of such Person’s Affiliates or Associates or any other Person referred to in<br>Section 1.1(h)(iv) holds such security provided that,
---	---
(1)	the ordinary business of any such Person (the “Investment Manager”) includes the management<br>of investment funds for
---	---

others (which others, for greater certainty, may include or be limited to one or more employee benefit plans<br>or pension plans) and such security is held by the Investment Manager in the ordinary course of such business in the performance of such Investment Manager’s duties for the account of any other Person (a “Client”), including non-discretionary accounts held on behalf of a Client by a dealer or broker registered under applicable law;
(2)	such Person is (i) the manager or trustee (the “Manager”) of a mutual fund (a<br>“Mutual Fund”) that is registered or qualified to issue its securities to investors under the securities laws of any province of Canada or the laws of the United States and such security is held in the ordinary course of business in<br>the performance of the Manager’s duties with respect to the Mutual Fund, or (ii) a Mutual Fund;
---	---
(3)	such Person (the “Trust Company”) is licensed to carry on the business of a trust company<br>under applicable laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons (each an “Estate Account”) or in relation to other accounts (each an<br>“Other Account”) and holds such security in the ordinary course of such duties for such Estate Accounts or for such Other Accounts;
---	---
(4)	such Person is an independent Person established by statute for purposes that include, and the ordinary<br>business or activity of such Person (the “Statutory Body”) includes, the management of investment funds for employee benefit plans, pension plans, insurance plans or various public bodies and the Statutory Body holds such securities<br>for the purposes of its activities as such;
---	---
(5)	such Person (the “Administrator”) is the administrator or trustee of one or more pension<br>funds, plans or related trusts (a “Plan”) or is a Plan registered or qualified under the laws of Canada or any Province thereof or the laws of the United States of America or any state thereof or is a Plan and holds such securities<br>for the purposes of its activities as Administrator or as a Plan; or
---	---
(6)	such Person is a Crown agent or agency;
---	---

provided, in any of the above cases, that the Investment Manager, the Manager, the Mutual Fund, the Trust Company, the Statutory Body, the Administrator, the Plan, or the Crown agent or agency, as the case may be, is not then making a Take-over Bid or has not then announced an intention to make a Take-over Bid other than an Offer to Acquire Voting Shares or other securities pursuant to a distribution by West Fraser or by means of ordinary market transactions (including pre-arranged trades entered into in the ordinary course of business of such Person) executed through the facilities of a stock exchange or

organized over-the-counter market, alone or by acting jointly or in concert with any other Person;

(C)	such Person or any other person acting jointly or in concert with such Person (1) is a Client of the<br>same Investment Manager as another Person on whose account the Investment Manager holds such security, (2) has an Estate Account or an Other Account of the same Trust Company as another Person on whose account the Trust Company holds such<br>security or (3) is a Plan with the same Administrator as another Plan on whose account the Administrator holds such security;
(D)	such Person or any other person acting jointly or in concert with such Person (1) is a Client of an<br>Investment Manager and such security is owned at law or in equity by the Investment Manager, or (2) has an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company or (3) is<br>a Plan and such security is owned at law or in equity by the Administrator of the Plan;
---	---
(E)	such Person is a registered holder of such security as a result of carrying on the business of, or acting as<br>a nominee of, a securities depositary;
---	---
(i)	“BCBCA” means the Business Corporations Act (British Columbia), R.S.B.C. 2002, c.57,<br>as amended, and the regulations made thereunder and any comparable or successor laws or regulations thereto;
---	---
(j)	“Board of Directors” means the board of directors of West Fraser or any duly constituted<br>and empowered committee thereof;
---	---
(k)	“Book Entry Form” means, in reference to securities, securities that have been issued and<br>registered in uncertificated form that are evidenced by an advice or other statement and which are maintained electronically on the records of West Fraser’s transfer agent, but for which no certificate has been issued;
---	---
(l)	“Book Entry Rights Exercise Procedures” has the meaning ascribed thereto in<br>Section 2.2(c);
---	---
(m)	“Business Day” means any day other than a Saturday, Sunday or a day on which banking<br>institutions in Vancouver, British Columbia are authorized or obligated by law to close;
---	---
(n)	“Canadian Dollar Equivalent” of any amount which is expressed in United States dollars<br>means, on any date, the Canadian dollar equivalent of any such amount determined by multiplying such amount by the U.S. - Canadian Exchange Rate in effect on such date;
---	---
(o)	“Canadian – U.S. Exchange Rate” means, on any date, the inverse of the U.S. - Canadian<br>Exchange Rate in effect on such date;
---	---
(p)	“close of business” on any given date means the time on such date (or, if such date is not<br>a Business Day, the time on the next succeeding Business Day) at which the principal office in Vancouver, British Columbia of the transfer agent for the Common Shares of West Fraser (or, after the Separation Time, the principal office in Vancouver<br>of the Rights
---	---

Agent) is closed to the public, provided, however, that for the purposes of the definition of<br>“Competing Permitted Bid” and the definition of “Permitted Bid”, “close of business” on any date means 11:59 p.m. (local time, at the place of deposit) on such date (or, if such date is not a Business Day,<br>11:59 p.m. (local time, at the place of deposit) on the next succeeding Business Day);
(q)	“Common Shares” means the common shares in the capital of West Fraser, but for greater<br>certainty does not include Class B common shares;
---	---
(r)	“Competing Permitted Bid” means a Take-over Bid that:
---	---
(i)	is made after a Permitted Bid or another Competing Permitted Bid has been made and prior to the expiry of<br>that other Permitted Bid;
---	---
(ii)	satisfies all components of the definition of a Permitted Bid other than the requirements set out in<br>Section 1.1(qq)(ii)(A) of the definition of a Permitted Bid; and
---	---
(iii)	contains, and the take-up and payment for securities tendered or<br>deposited thereunder are subject to, an irrevocable and unqualified condition that no Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the last day of the minimum initial deposit period that<br>such Take-over Bid must remain open for deposits of securities thereunder pursuant to NI 62-104 after the date of the Take-over Bid constituting the Competing Permitted Bid;
---	---

provided, however, that a Take-over Bid that qualified as a Competing Permitted Bid shall cease to be a Competing Permitted Bid as soon as such Take-over Bid ceases to meet any or all of the provisions of this definition, and any acquisition of Voting Shares made pursuant to such Take-over Bid that qualified as a Competing Permitted Bid, including any acquisition of Voting Shares made before such Take-over Bid ceased to be a Competing Permitted Bid, will not be a Permitted Bid Acquisition.

(s)	“controlled” a Person is considered to be “controlled” by another Person or two<br>or more Persons acting jointly or in concert if:
(i)	in the case of a Person other than a partnership or a limited partnership, including a corporation or body<br>corporate:
---	---
(A)	securities entitled to vote in the election of directors (including, for Persons other than corporations,<br>the administrators, managers, trustees or other individuals performing similar functions in respect of any such Person) carrying more than 50% of the votes for the election of directors of such Person are held, directly or indirectly, other than by<br>way of security only, by or on behalf of the other Person or two or more Persons acting jointly or in concert; and
---	---
(B)	the votes carried by such securities are entitled, if exercised, to elect, appoint or designate a majority<br>of the board of directors of such Person;
---	---

(ii)	in the case of a partnership other than a limited partnership, more than 50% of the interests in such<br>partnership are held, directly or indirectly by the other Person or Persons; and
(iii)	in the case of a limited partnership, the other Person or each of the other Persons is a general partner of<br>the limited partnership,
---	---

and “controls”, “controlling” and “under common control with” shall be interpreted accordingly;

(t)	“Convertible Securities” means, at any time, any securities issued by the Corporation<br>(including rights, warrants and options) carrying any purchase, exercise, conversion or exchange right, pursuant to which the holder thereof may acquire Voting Shares or other securities convertible into or exercisable or exchangeable for Voting<br>Shares (in each case, whether such right is exercisable immediately or after a specified period and whether or not on condition or the happening of any contingency).
(u)	“Convertible Security Acquisition” means the acquisition of Voting Shares upon the exercise<br>of Convertible Securities acquired by a Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition.
---	---
(v)	“Co-Rights Agents” has the meaning ascribed thereto<br>in Section 4.1(a);
---	---
(w)	“Disposition Date” has the meaning ascribed thereto in Section 5.1(a);<br>
---	---
(x)	“Dividend Reinvestment Acquisition” means an acquisition of Voting Shares of any class<br>pursuant to a Dividend Reinvestment Plan;
---	---
(y)	“Dividend Reinvestment Plan” means a regular dividend reinvestment or other program or plan<br>of West Fraser made available by West Fraser to holders of its securities and/or to holders of securities of a Subsidiary of West Fraser, where such program or plan permits the holder to direct that some or all of:
---	---
(i)	any dividends paid in respect of shares of any class of West Fraser or a Subsidiary;
---	---
(ii)	any proceeds of redemption of shares of West Fraser or a Subsidiary;
---	---
(iii)	any interest paid on evidences of indebtedness of West Fraser or a Subsidiary; or
---	---
(iv)	any optional cash payments; be applied to the purchase of Voting Shares;
---	---
(z)	“Effective Date” means April 9, 2020;
---	---
(aa)	“Election to Exercise” has the meaning ascribed thereto in Section 2.2(d);<br>
---	---
(bb)	“Exempt Acquisition” means an acquisition of Beneficial ownership of Voting Shares or<br>Convertible Securities by a Person:
---	---
(i)	in respect of which the Board of Directors has waived the application of Section 3.1 pursuant to the<br>provisions of Sections 5.1(a), (b) or (f); or
---	---

(ii)	pursuant to an amalgamation, plan of arrangement or other statutory procedure having similar effect which<br>has been approved by the Board of Directors and the holders of Voting Shares by the requisite majority or majorities of the holders of Voting Shares at a meeting duly called and held for such purpose in accordance with the provisions of the BCBCA,<br>the notice of articles and the articles of West Fraser and any other applicable legal requirements; or
(iii)	pursuant to a distribution to the public by the Corporation of Voting Shares or Convertible Securities made<br>pursuant to a prospectus or private placement provided that the Person in question does not thereby acquire a greater percentage of Voting Shares representing the right to acquire Voting Shares than the percentage of Voting Shares such Person<br>Beneficially owned immediately prior to such acquisition;
---	---
(cc)	“Exercise Price” means, as of any date, the price at which a holder of a Right may purchase<br>the securities issuable upon exercise of one whole Right which, until adjustment thereof in accordance with the terms hereof, shall be an amount equal to five times the Market Price per Common Share determined as of the Separation Time;<br>
---	---
(dd)	“Expansion Factor” has the meaning ascribed thereto in Section 2.3(a);<br>
---	---
(ee)	“Expiration Time” means the close of business on that date which is the earliest date of<br>termination of this Agreement as provided for in Section 5.15 or, if this Agreement is confirmed and subsequently reconfirmed pursuant to Section 5.15;
---	---
(ff)	“Flip-in Event” means a transaction in or pursuant<br>to which any Person becomes an Acquiring Person;
---	---
(gg)	“holder” has the meaning ascribed thereto in Section 2.8;
---	---
(hh)	“Independent Shareholders” means holders of any Voting Shares, other than<br>
---	---
(i)	any Acquiring Person;
---	---
(ii)	any Offeror (other than any Person who pursuant to Section 1.1(h) is not deemed to Beneficially own the<br>Voting Shares held by such Person);
---	---
(iii)	any Affiliate or Associate of any Acquiring Person or Offeror (referred to in Clause (ii) of this<br>definition);
---	---
(iv)	any Person acting jointly or in concert with any Acquiring Person or Offeror (referred to in Clause<br>(ii) of this definition); and
---	---
(v)	any employee benefit plan, stock purchase plan, deferred profit sharing plan and any similar plan or trust<br>for the benefit of employees of West Fraser or a Subsidiary of West Fraser, unless the beneficiaries of the plan or trust direct the manner in which the Voting Shares are to be voted or withheld from voting or direct whether the Voting Shares are to<br>be tendered to a Take-over Bid;
---	---
(ii)	“Lock-up Agreement” means an agreement between a<br>Person and one or more holders of Voting Shares or Convertible Securities (each a “Locked-up Person”) the terms of
---	---

10 -

which are publicly disclosed and a copy of which agreement is made available to the public (including West<br>Fraser) not later than (i) the date the Lock-up Bid (as defined below) is publicly announced or, (ii) if the Lock-up Bid has been made prior to the date on<br>which such agreement is entered into then as soon as possible after it is entered into and in any event not later than the date following the date of such agreement, pursuant to which each Locked-up Person<br>agrees to deposit or tender Voting Shares or Convertible Securities to a Take-over Bid (the “Lock-up Bid”) to be made or made by the Person or any of such Person’s Affiliates or<br>Associates or any other Person referred to in Section 1.1(h)(iv) and which provides:
(i)	that any agreement to deposit or tender to, or to not withdraw Voting Shares or Convertible Securities from,<br>the Lock-up Bid is terminable at the option of the Locked-up Person in order to tender or deposit such Voting Shares or Convertible Securities to another Take-over Bid<br>or support another transaction:
---	---
(A)	where the price or value per Voting Share or Convertible Security offered under such other Take-over Bid or<br>transaction is higher than the price or value per Voting Share or Convertible Security offered under the Lock-up Agreement; or
---	---
(B)	if:
---	---
(1)	the price or value per Voting Share or Convertible Security offered under the other Take-over Bid or<br>transaction exceeds the price or value per Voting Share or Convertible Security offered or proposed to be offered under the Lock-up Bid by as much or more than a specified amount (the “SpecifiedAmount”) and the Specified Amount is not greater than 7% of the price or value per Voting Share or Convertible Security that is offered or proposed to be offered under the Lock-up Bid; or<br>
---	---
(2)	the number of Voting Shares or Convertible Securities to be purchased under the other Take-over Bid or<br>transaction exceeds the number of Voting Shares offered to be purchased under the Lock-up Bid by as much or more than a specified number of Voting Shares (the “Specified Number of Shares”) and<br>the Specified Number of Shares is not greater than 7% of the number of Voting Shares offered to be purchased under the Lock-up Bid, at a price or value per Voting Share or Convertible Security, as applicable,<br>that is not less than the price or value per Voting Share or Convertible Security offered under the Lock-up Bid;
---	---

and the agreement may contain a right of first refusal or require a period of delay to give such Person an opportunity to match a higher price or value in another Take-over Bid or transaction or other similar limitation on a Locked-up Person’s right to withdraw Voting Shares or Convertible Securities from the agreement, so long as the limitation does not preclude the exercise by the Locked-up Person of the right to withdraw Voting Shares or Convertible Securities during the period of the other Take-over Bid or transaction; and

11 -

(ii)	no “break-up” fees,<br>“top-up” fees, penalties, expenses or other amounts that exceed in the aggregate the greater of:
(A)	the cash equivalent of 2.5% of the price or value payable under the<br>Lock-up Bid to a Locked-up Person; and
---	---
(B)	50% of the amount by which the price or value payable under another Take-over Bid or transaction to a Locked-up Person exceeds the price or value of the consideration that such Locked-up Person would have received under the Lock-up Bid,<br>shall be payable by a Locked-up Person pursuant to the agreement in the event a Locked-up Person fails to deposit or tender Voting Shares or Convertible Securities to<br>the Lock-up Bid or withdraws Voting Shares or Convertible Securities previously tendered thereto in order to tender to another Take-over Bid or support another transaction;
---	---
(jj)	“Market Price” per share of any securities on any date of determination means the average<br>of the daily closing sale prices per security of such class of securities (determined as described below) on each of the 20 consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however, that if an<br>event of a type analogous to any of the events described in Section 2.3 hereof shall have caused the closing sale prices used to determine the Market Price on any Trading Days not to be fully comparable with the closing sale price on such date<br>of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such closing sale price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in<br>Section 2.3 hereof in order to make it fully comparable with the closing sale price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day. The closing sale price per<br>security of any securities on any date shall be:
---	---
(i)	the closing board lot sale price per security or, if such price is not available, the average of the closing<br>bid and asked prices, for each of such securities as reported by the principal Canadian securities exchange (as determined by volume of trading) on which such securities are listed or admitted to trading or, if for any reason neither of such prices<br>is available on such day or the securities are not listed or admitted to trading on a Canadian securities exchange, the closing board lot sale price per security or, if such price is not available, the average of the closing bid and asked prices,<br>for each security as reported by the principal United States securities exchange (as determined by the volume of trading) on which such securities are listed or admitted for trading;
---	---
(ii)	if for any reason none of such prices are available on such date or the securities are not listed or<br>admitted to trading on a Canadian securities exchange or a United States securities exchange, the last sale price or, in case no sale takes place on such date, the average of the high bid and low asked prices for each of such securities in the over-the-counter market, as quoted by any reporting system then in use (as determined by the Board of Directors); or
---	---
(iii)	if for any reason none of such prices are available on such day or the securities are not listed or admitted<br>to trading on a Canadian securities exchange or a United States securities exchange or quoted by any such reporting system, the average
---	---

12 -

of the closing bid and asked prices as furnished by a professional market maker making a market in the<br>securities selected in good faith by the Board of Directors;

provided, however, that if on any such date none of such prices is available, the closing sale price per security of such securities on such date shall mean the fair value per security of the securities on such date as determined by a nationally or internationally recognized investment dealer or investment banker selected by the Board of Directors with respect to the fair value per security of such securities and provided further that if an event of a type analogous to any of the events described in Section 2.3 hereof shall have caused any price used to determine the Market Price on any Trading Day not to be fully comparable with the price as so determined on the Trading Day immediately preceding such date of determination, each such price so used shall be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 hereof in order to make it fully comparable with the price on the Trading Day immediately preceding such date of determination. The Market Price shall be expressed in Canadian dollars and, if initially determined in respect of any day forming part of the 20 consecutive Trading Day period in question in United States dollars, such amount shall be translated into Canadian dollars on such date at the Canadian Dollar Equivalent thereof; and

(kk)	“NI 62-103” means National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues adopted by the Canadian securities regulatory authorities and any comparable or successor laws, instruments or rules<br>thereto;
(ll)	“NI 62-104” means National Instrument 62-104 – Take-Over Bids and Issuer Bids adopted by the Canadian securities regulatory authorities and any comparable or successor laws, instruments or rules thereto;
---	---
(mm)	“Nominee” has the meaning ascribed thereto in Section 2.2(c);
---	---
(nn)	“Offer to Acquire” includes:
---	---
(i)	an offer to purchase or a solicitation of an offer to sell Voting Shares or Convertible Securities of any<br>class or classes, and
---	---
(ii)	an acceptance of an offer to sell Voting Shares or Convertible Securities of any class or classes, whether<br>or not such offer to sell has been solicited, or any combination thereof, and the Person accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell;
---	---
(oo)	“Offeror” means a Person who has announced, and has not withdrawn, an intention to make or<br>who has made, and has not withdrawn, a Take-over Bid, other than a Person who has completed a Permitted Bid, a Competing Permitted Bid or an Exempt Acquisition;
---	---
(pp)	“Offeror’s Securities” means Voting Shares Beneficially owned by an Offeror on the<br>date of the Offer to Acquire;
---	---
(qq)	“Permitted Bid” means a Take-over Bid made by an Offeror that is made by means of a<br>Take-over Bid circular and which also complies with the following additional provisions:
---	---
(i)	the Take-over Bid is made to all holders of record of Voting Shares, other than the Offeror;<br>
---	---

13 -

(ii)	the Take-over Bid contains, and the take-up and payment for<br>securities tendered or deposited is subject to, an irrevocable and unqualified condition that no Voting Shares will be taken up or paid for pursuant to the Take-over Bid:
(A)	prior to the close of business on a date which is not less than 105 days following the date of the Take-over<br>Bid or such shorter minimum period as determined in accordance with section 2.28.2 or section 2.28.3 of NI 62 104 for which a Take-Over Bid (that is not exempt from any of the requirements of Division 5 (Bid Mechanics) of NI 62-104) must remain open for deposit of securities thereunder; and
---	---
(B)	unless at the close of business on the date Voting Shares are first taken up or paid for under such<br>Take-over Bid, more than 50% of the Voting Shares held by Independent Shareholders shall have been deposited or tendered pursuant to the Take-over Bid and not withdrawn;
---	---
(iii)	the Take-over Bid contains an irrevocable and unqualified provision that, unless the Take-over Bid is<br>withdrawn, Voting Shares may be deposited pursuant to such Take-over Bid at any time during the period which applies pursuant to Section 1.1(qq)(ii)(A) and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn until<br>taken up and paid for (other than where prohibited from being withdrawn under NI 62-104 in the case of a partial take-over bid); and
---	---
(iv)	the Take-over Bid contains an irrevocable and unqualified provision that, unless the Take-over Bid is<br>withdrawn, in the event that the deposit condition set forth in Section 1.1(qq)(ii)(B) is satisfied the Offeror will make a public announcement of that fact and the Take-over Bid will be extended for a period of not less than 10 days from the<br>date of such public announcement;
---	---
(rr)	“Permitted Bid Acquisition” means an acquisition of Voting Shares made pursuant to a<br>Permitted Bid or a Competing Permitted Bid;
---	---
(ss)	“Person” includes an individual, firm, association, trustee, executor, administrator, legal<br>or personal representative, body corporate, company, corporation, trust, partnership, limited partnership, joint venture, syndicate or other form of unincorporated association, a government and its agencies or instrumentalities, any entity or group<br>(whether or not having legal personality), any successor (by merger, statutory amalgamation or otherwise) and any of the foregoing acting in any derivative, representative or fiduciary capacity;
---	---
(tt)	“Personal Information” means the type of information regulated by Privacy Laws and<br>collected, used, disclosed or retained by West Fraser, as applicable, including, without limitation, personal information regarding any member of West Fraser’s customers, suppliers, employees or agents, such as an individual’s name,<br>address, age, gender, social security or other identification number, income, family status, citizenship, employment, assets, liabilities, source of funds, payment records, credit information, personal references and health records to the extent<br>regulated by Privacy Laws as applicable to West Fraser;
---	---

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(uu)	“Privacy Laws” means all applicable federal, state, municipal or other laws governing the<br>collection, use, disclosure and retention of Personal Information;
(vv)	“Pro Rata Acquisition” means an acquisition of Voting Shares or Convertible Securities by a<br>Person pursuant to:
---	---
(i)	a Dividend Reinvestment Acquisition;
---	---
(ii)	a stock dividend, stock split or other event in respect of securities of one or more particular classes or<br>series of West Fraser pursuant to which such Person becomes the Beneficial owner of Voting Shares or Convertible Securities on the same pro rata basis as all other holders of securities of the particular class or series;
---	---
(iii)	any other event pursuant to which all holders of Voting Shares are entitled to receive Voting Shares or<br>Convertible Securities on a pro rata basis; including pursuant to the receipt and/or exercise of rights issued by West Fraser to all the holders of a class of Voting Shares to subscribe for or purchase Voting Shares or Convertible Securities,<br>provided that such rights are acquired directly from West Fraser as part of a rights offering and not from any other Person and provided that the Person does not thereby acquire a greater percentage of Voting Shares or Convertible Securities, than<br>the Person’s percentage of Voting Shares Beneficially owned immediately prior to such receipt or exercise; or
---	---
(iv)	a distribution by West Fraser of Voting Shares, or Convertible Securities (and the conversion or exchange of<br>such convertible or exchangeable securities) made pursuant to a prospectus or a distribution by way of private placement by West Fraser, provided that the Person does not thereby acquire a greater percentage of Voting Shares of that class or<br>securities convertible or exchangeable for Voting Shares, than the Person’s percentage of Voting Shares Beneficially owned immediately prior to such acquisition;
---	---
(ww)	“Record Time” means 12:01 a.m. (Pacific Time) on the Effective Date;
---	---
(xx)	“Redemption Price” has the meaning set forth in Section 5.1(c) of this Agreement;<br>
---	---
(yy)	“Right” means a right to purchase a Common Share of West Fraser, upon the terms and subject<br>to the conditions set forth in this Agreement;
---	---
(zz)	“Rights Agent” means Computershare Investor Services Inc., a company governed under the<br>laws of Canada, or any successor Rights Agent appointed pursuant to Section 4.4;
---	---
(aaa)	“Rights Certificate” means the certificates representing the Rights after the Separation<br>Time, which shall be substantially in the form attached hereto as Attachment 1;
---	---
(bbb)	“Rights Holders’ Special Meeting” means a meeting of the holders of Rights called by<br>the Board of Directors for the purpose of approving a supplement or amendment to this Agreement pursuant to Section 5.4(c);
---	---
(ccc)	“Rights Register” and “Rights Registrar” have the meanings set forth in<br>Section 2.6(a) of this Agreement;
---	---

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(ddd)	“Securities Act (British Columbia)” means the Securities Act, R.S.B.C. 1996, c. 418,<br>as amended, and the regulations and rules thereunder, and any comparable or successor laws or regulations or rules thereto;
(eee)	“Securities Act (Ontario)” means the Securities Act, R.S.O., 1990, S.5, as amended,<br>and the regulations and rules thereunder, and any comparable or successor laws or regulations or rules thereto;
---	---
(fff)	“Separation Time” means the close of business on the tenth Trading Day after the earlier<br>of:
---	---
(i)	the Stock Acquisition Date;
---	---
(ii)	the date of the commencement of or first public announcement of the intent of any Person (other than West<br>Fraser or any Subsidiary of West Fraser) to commence a Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid, as the case may be); and
---	---
(iii)	the date upon which a Permitted Bid or Competing Permitted Bid ceases to be such,
---	---

or such later date as may be determined by the Board of Directors, provided that, if any such Take-over Bid expires, is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for the purposes of this definition, never to have been made and provided that if the Board of Directors determine pursuant to Section 5.1 to waive the application of Section 3.1 to a Flip-in Event prior to the Separation Time, such Flip in Event shall be deemed never to have occurred;

(ggg)	“Stock Acquisition Date” means the first date of public announcement (which, for purposes<br>of this definition, shall include, without limitation, a report filed pursuant to Section 5.2 of NI 62-104, Section 4.5 of NI 62-103 or Section 13(d) of<br>the U.S. Exchange Act) by West Fraser or an Acquiring Person of facts indicating that an Acquiring Person has become such;
(hhh)	“Subsidiary” - a corporation is a Subsidiary of another corporation if:<br>
---	---
(i)	it is controlled by:
---	---
(A)	that other, or
---	---
(B)	that other and one or more Persons each of which is controlled by that other, or
---	---
(C)	two or more Persons each of which is controlled by that other, or
---	---
(ii)	it is a Subsidiary of a Person that is that other’s Subsidiary;
---	---
(iii)	“Take-over Bid” means an Offer to Acquire Voting Shares or Convertible Securities if,<br>assuming that the Voting Shares or Convertible Securities subject to the Offer to Acquire are acquired and are Beneficially owned at the date of such Offer to Acquire by the Person making such Offer to Acquire, such Voting Shares (including Voting<br>Shares that may be
---	---

16 -

acquired upon conversion, exercise or exchange of Convertible Securities) together with the Offeror’s<br>Securities constitute in the aggregate 20% or more of the outstanding Voting Shares on the date of the Offer to Acquire;
(jjj)	“Trading Day”, when used with respect to any securities, means a day on which the principal<br>Canadian securities exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian securities exchange, a day on which the<br>principal United States securities exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian or United States securities<br>exchange, a Business Day;
---	---
(kkk)	“U.S. - Canadian Exchange Rate” means, on any date:
---	---
(i)	if on such date the Bank of Canada sets a daily exchange rate for the conversion of one United States dollar<br>into Canadian dollars, such rate; and
---	---
(ii)	in any other case, the rate for such date for the conversion of one United States dollar into Canadian<br>dollars calculated in such manner as may be determined by the Board of Directors from time to time acting in good faith;
---	---
(lll)	“U.S. Dollar Equivalent” of any amount which is expressed in Canadian<br>dollars means, on any date, the United States dollar equivalent of such amount determined by multiplying such amount by the Canadian - U.S. Exchange Rate in effect on such date;
---	---
(mmm)	“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended,<br>and the rules and regulations thereunder as now in effect or as the same may from time to time be amended, re-enacted or replaced;
---	---
(nnn)	“U.S. Securities Act” means the United States Securities Act of 1933, as amended, and the<br>rules and regulations thereunder as now in effect or as the same may from time to time be amended, re-enacted or replaced;
---	---
(ooo)	“Voting Shares” means the Common Shares in the capital of West Fraser; and<br>
---	---
(ppp)	“West Fraser” means West Fraser Timber Co. Ltd., a company governed by the laws of British<br>Columbia together where the context requires, with its subsidiaries.
---	---
1.2	Currency
---	---

All sums of money which are referred to in this Agreement are expressed in lawful money of Canada, unless otherwise specified.

1.3	Headings

The division of this Agreement into Articles, Sections, Paragraphs, or other portions hereof and the insertion of headings, subheadings and a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

17 -

1.4	Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares

For purposes of this Agreement, the percentage of Voting Shares of any class Beneficially owned by any Person, shall be and be deemed to be the product (expressed as a percentage) determined by the formula:

100 x A/B

where:

A = the number of votes for the election of all directors on the Board of Directors generally attaching to the Voting Shares of that class Beneficially owned by such Person; and

B = the number of votes for the election of all directors on the Board of Directors generally attaching to all outstanding Voting Shares of such class.

Where any Person is deemed to Beneficially own unissued Voting Shares, such Voting Shares shall be deemed to be outstanding for the purpose of calculating the percentage of Voting Shares owned by such Person.

1.5	Acting Jointly or in Concert

For purposes of this Agreement, a Person is acting jointly or in concert with every Person who, as a result of any agreement, commitment or understanding whether formal or informal, and whether or not in writing, with the first Person or any Associate or Affiliate of the first Person, acquires or makes an Offer to Acquire Voting Shares or Convertible Securities (other than customary agreements with and between underwriters and/or banking group members and/or selling group members with respect to a public offering or private placement of securities or pledges of securities in the ordinary course of business).

ARTICLE 2

RIGHTS

2.1	Legend on Share Certificates

Certificates for Common Shares issued after the Record Time but prior to the earlier of the Separation Time and the Expiration Time, shall evidence, in addition to Common Shares, one Right for each Common Share represented thereby and shall have impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form:

Until the Separation Time (defined in the Shareholder Rights Plan Agreement referred to below), this certificate also evidences rights of the holder described in a Shareholder Rights Plan Agreement, dated April 9, 2020, as amended or supplemented from time to time (the “Shareholder Rights Plan Agreement”), between West Fraser Timber Co. Ltd (“West Fraser”) and Computershare Investor Services Inc. (the “Rights Agent”) (as successor to TMX Trust Company (formerly, the AST Trust Company (Canada)), the terms of which are incorporated herein by reference and a copy of which is on file at the principal executive offices of West Fraser. Under certain circumstances set out in the Shareholder Rights Plan Agreement, the rights may be amended, redeemed, may expire, may become null and void or may be evidenced by separate certificates and no longer evidenced by this certificate.

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West Fraser will mail or arrange for the mailing of a copy of the Shareholder Rights Plan Agreement to the holder of this certificate without charge as soon as practicable after the receipt of a written request therefor.

Any Common Shares issued and registered in Book Entry Form (that are evidenced by an advice or other statement on which are maintained electronically the records of the transfers) after the Record Time but prior to the earlier of the Separation Time and the Expiration Time, shall evidence, in addition to the Common Shares, one Right for each Common Share represented by such registration and the registration record of such Common Shares shall include the foregoing legend, adapted accordingly as the Rights Agent may reasonably require.

Common Shares (both registered in Book Entry Form or for which share certificates have been issued) that are issued and outstanding at the Record Time, which as at the Record Time represented Common Shares, shall also evidence one Right for each Common Share evidenced thereby, notwithstanding the absence of the foregoing legend, until the earlier of the Separation Time and the Expiration Time.

2.2	Initial Exercise Price; Exercise of Rights; Detachment of Rights
(a)	Subject to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the<br>Separation Time and prior to the Expiration Time, to purchase one Common Share for the Exercise Price (with the Exercise Price and number of Common Shares being subject to adjustment as set forth below). Notwithstanding any other provision of this<br>Agreement, any Rights held by West Fraser or any of its Subsidiaries shall be void.
---	---
(b)	Until the Separation Time,
---	---
(i)	the Rights shall not be exercisable and no Right may be exercised; and
---	---
(ii)	each Right will be evidenced by the certificate for the associated Common Share registered in the name of<br>the holder thereof (which certificate shall also be deemed to represent a Rights Certificate) or by the Book Entry Form registration for the associated Common Shares and will be transferable only together with, and will be transferred by a transfer<br>of, such associated Common Share.
---	---
(c)	From and after the Separation Time and prior to the Expiration Time:
---	---
(i)	the Rights shall be exercisable; and
---	---
(ii)	the registration and transfer of Rights shall be separate from and independent of Common Shares.<br>
---	---

Promptly following the Separation Time, West Fraser will determine whether it wishes to issue Rights Certificates or whether it will maintain the Rights in Book Entry Form. In the event that West Fraser determines to maintain Rights in Book Entry Form, it will put in place such alternative procedures as are directed by the Rights Agent for the Rights to be maintained in Book Entry Form (the “Book Entry Rights Exercise Procedures”), it being hereby acknowledged that such procedures shall, to the greatest extent possible, replicate in all substantive respects the procedures set out in this Agreement with respect to the exercise of the Rights Certificates and that the procedures set out in this Agreement shall be modified only to the extent necessary, as determined by the Rights Agent, to permit West Fraser to maintain the Rights in Book Entry Form. In such event, the Book Entry Rights Exercise Procedures shall be deemed to replace the procedures set out in this Agreement with respect to the exercise of Rights and all provisions of this

19 -

Agreement referring to Rights Certificates shall be applicable to Rights registered in Book Entry Form in like manner as to Rights in certificated form.

In the event that West Fraser determines to issue a Rights Certificate, it will prepare and the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person, any other Person whose Rights are or become void pursuant to the provisions of Section 3.1(b) and, in respect of any Rights Beneficially owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a “Nominee”)), at such holder’s address as shown by the records of West Fraser (West Fraser hereby agreeing to furnish copies of such records to the Rights Agent for this purpose):

(x)

a Rights Certificate in substantially the form set out in Attachment 1 hereof, appropriately completed, representing the number of Rights held by such holder at the Separation Time and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as West Fraser may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law, rule or regulation or judicial or administrative order or with any rule or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time be listed or traded, or to conform to usage; and

(y)

a description of the Rights,

---

provided that a Nominee shall be sent the materials provided for in (x) and (y) in respect of all Common Shares held of record by it which are not Beneficially owned by an Acquiring Person. In order for West Fraser to determine whether any Person is holding Common Shares which are Beneficially owned by another Person West Fraser may require such first mentioned Person to furnish such information and documentation as West Fraser deems necessary or appropriate in order to make such determination.

(d)	Rights may be exercised, in whole or in part, on any Business Day after the Separation Time and prior to the<br>Expiration Time by submitting to the Rights Agent in the manner specified in the Rights Certificate:
(i)	the Rights Certificate evidencing such Rights;
---	---
(ii)	an election to exercise such Rights (an “Election to Exercise”) substantially in the form<br>attached to the Rights Certificate or in the form determined appropriate for Rights in Book Entry Form, in either case duly completed and executed by the holder or his executors or administrators or other personal representatives or his or their<br>legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent; and
---	---
(iii)	payment by certified cheque, banker’s draft or money order payable to the order of the Rights Agent, of<br>a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge which may be payable in respect of the transfer or delivery of Rights Certificates or the registration, in<br>Book Entry Form, of the Common Shares in a name other than that of the holder of the Rights being exercised.
---	---
(e)	In the event that West Fraser determines to issue a Rights Certificate, then upon receipt of a Rights<br>Certificate, together with a completed Election to Exercise executed in
---	---

20 -

accordance with Section 2.2(d)(ii), which does not indicate that such Right is null and void as provided<br>by Section 3.1(b), and payment as set forth in Section 2.2(d)(iii), the Rights Agent (unless otherwise instructed by West Fraser in the event that West Fraser is of the opinion that the Rights cannot be exercised in accordance with this<br>Agreement) will thereupon promptly:
(i)	direct the transfer agent to register, in the name of the holder of the Rights being exercised or in such<br>other name as may be designated by such holder, in Book Entry Form the number of such Common Shares to be purchased (West Fraser hereby irrevocably authorizing its transfer agents to comply with all such requisitions);
---	---
(ii)	when appropriate, requisition from West Fraser the amount of cash to be paid in lieu of issuing fractional<br>Common Shares;
---	---
(iii)	after receipt of confirmation from the transfer agent that the registration, in Book Entry Form, referred to<br>in Section 2.2(e)(i) has been completed, deliver the same to or upon the order of the registered holder of such Rights Certificates, registered in such name or names as may be designated by such holder;
---	---
(iv)	when appropriate, after receipt, deliver the cash referred to in Section 2.2(e)(ii) to or to the order<br>of the registered holder of such Rights Certificate; and
---	---
(v)	tender to West Fraser all payments received on the exercise of the Rights.
---	---
(f)	In case the holder of any Rights shall exercise less than all the Rights evidenced by such holder’s<br>Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Section 5.5(a)) will be issued by the Rights Agent to such holder or to such holder’s duly authorized assigns.<br>
---	---
(g)	West Fraser covenants and agrees that it will:
---	---
(i)	take all such action as may be necessary and within its power to ensure that all Common Shares issued upon<br>exercise of Rights shall, at the time of registration in Book Entry Form of such Common Shares (subject to payment of the Exercise Price), be duly authorized, validly issued and fully paid and non-assessable;<br>
---	---
(ii)	take all such action as may be necessary and within its power to comply with the provisions of<br>Section 3.1 including all actions necessary to comply with the requirements of the BCBCA, the Securities Act (British Columbia), the Securities Act (Ontario), the U.S. Securities Act and the U.S. Exchange Act and the securities<br>laws or comparable legislation of each of the provinces of Canada and any other applicable law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of<br>Rights;
---	---
(iii)	use reasonable efforts to cause all Common Shares issued upon exercise of Rights to be listed on the<br>principal stock exchanges on which such Common Shares were traded immediately prior to the Stock Acquisition Date;
---	---

21 -

(iv)	pay when due and payable, if applicable, any and all Canadian and United States federal, provincial, state<br>and municipal transfer taxes and charges (not including any income or capital taxes of the holder or exercising holder or any liability of West Fraser to withhold tax) which may be payable in respect of the original issuance or delivery of the<br>Rights Certificates, or the registration in Book Entry Form of Common Shares to be issued upon exercise of any Rights, provided that West Fraser shall not be required to pay any transfer tax or charge which may be payable in respect of any transfer<br>involved in the transfer or delivery of Rights Certificates or the registration in Book Entry Form of Common Shares in a name other than that of the holder of the Rights being transferred or exercised; and
(v)	after the Separation Time, except as permitted by Section 5.1, not take (or permit any Subsidiary to<br>take) any action if at the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.
---	---
2.3	Adjustments to Exercise Price; Number of Rights
---	---

The Exercise Price, the number and kind of securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 2.3.

(a)	In the event West Fraser shall at any time after the Record Time and prior to the Expiration Time:<br>
(i)	declare or pay a dividend on Common Shares payable in Common Shares (or other securities exchangeable for or<br>convertible into or giving a right to acquire Common Shares or other securities of West Fraser) other than pursuant to any Dividend Reinvestment Plan;
---	---
(ii)	subdivide or change the then outstanding Common Shares into a greater number of Common Shares;<br>
---	---
(iii)	consolidate or change the then outstanding Common Shares into a smaller number of Common Shares; or<br>
---	---
(iv)	issue any Common Shares (or other securities exchangeable for or convertible into or giving a right to<br>acquire Common Shares or other securities of West Fraser) in respect of, in lieu of or in exchange for existing Common Shares except as otherwise provided in this Section 2.3,
---	---

the Exercise Price and the number of Rights outstanding, or, if the payment or effective date therefor shall occur after the Separation Time, the securities purchasable upon exercise of Rights, shall be adjusted as of the payment or effective date in the manner set forth below. If an event occurs which would require an adjustment under both this Section 2.3 and Section 3.1(a), the adjustment provided for in this Section 2.3 shall be in addition to, and shall be made prior to, any adjustment required under Section 3.1(a).

If the Exercise Price and number of Rights outstanding are to be adjusted:

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(x)

the Exercise Price in effect after such adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment divided by the number of Common Shares (or other capital stock) (the “Expansion Factor”) that a holder of one Common Share immediately prior to such dividend, subdivision, change, consolidation or issuance would hold thereafter as a result thereof; and

(y)

each Right held prior to such adjustment will become that number of Rights equal to the Expansion Factor,

---

and the adjusted number of Rights will be deemed to be distributed among the Common Shares with respect to which the original Rights were associated (if they remain outstanding) and the shares issued in respect of such dividend, subdivision, change, consolidation or issuance, so that each such Common Share (or other capital stock) will have exactly one Right associated with it.

For greater certainty, if the securities purchasable upon exercise of Rights are to be adjusted, the securities purchasable upon exercise of each Right after such adjustment will be the securities that a holder of the securities purchasable upon exercise of one Right immediately prior to such dividend, subdivision, change, consolidation or issuance would hold thereafter after giving full effect to such dividend, subdivision, change, consolidation or issuance.

If, after the Record Time and prior to the Expiration Time, West Fraser shall issue any shares of capital stock other than Common Shares in a transaction of a type described in Section 2.3(a)(i) or (iv), shares of such capital stock shall be treated herein as nearly equivalent to Common Shares as may be practicable and appropriate under the circumstances and West Fraser and the Rights Agent agree to amend this Agreement in order to effect such treatment.

In the event West Fraser shall at any time after the Record Time and prior to the Separation Time issue any Common Shares otherwise than in a transaction referred to in this Section 2.3(a), each such Common Share so issued shall automatically have one new Right associated with it, which Right shall be evidenced by the certificate representing such associated Common Share.

(b)

In the event West Fraser shall at any time after the Record Time and prior to the Separation Time fix a record date for the issuance of rights, options or warrants to all holders of Common Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Shares (or securities convertible into or exchangeable for or carrying a right to purchase Common Shares) at a price per Common Share (or, if a security convertible into or exchangeable for or carrying a right to purchase or subscribe for Common Shares, having a conversion, exchange or exercise price, including the price required to be paid to purchase such convertible or exchangeable security or right per share) less than the Market Price per Common Share on such record date, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction:

(i)

the numerator of which shall be the number of Common Shares outstanding on such record date, plus the number of Common Shares that the aggregate offering price of the total number of Common Shares so to be offered (and/or the

---

23 -

aggregate initial conversion, exchange or exercise price of the convertible or exchangeable securities or<br>rights so to be offered, including the price required to be paid to purchase such convertible or exchangeable securities or rights) would purchase at such Market Price per Common Share; and
(ii)	the denominator of which shall be the number of Common Shares outstanding on such record date, plus the<br>number of additional Common Shares to be offered for subscription or purchase (or into which the convertible or exchangeable securities or rights so to be offered are initially convertible, exchangeable or exercisable).
---	---

In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of Rights. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, or if issued, are not exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would then be in effect if such record date had not been fixed, or to the Exercise Price which would be in effect based upon the number of Common Shares (or securities convertible into, or exchangeable or exercisable for Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.

For purposes of this Agreement, the granting of the right to purchase Common Shares (whether from treasury or otherwise) pursuant to a Dividend Reinvestment Plan or any employee or director benefit, stock option, employee purchase, director compensation or similar plans shall be deemed not to constitute an issue of rights, options or warrants by West Fraser; provided, however, that, in all such cases, the right to purchase Common Shares is at a price per share of not less than 90% of the current market price per share (determined as provided in such plans) of the Common Shares.

(c)	In the event West Fraser shall at any time after the Record Time and prior to the Separation Time fix a<br>record date for the making of a distribution to all holders of Common Shares (including any such distribution made in connection with a merger, amalgamation, arrangement, plan, compromise or reorganization in which the Corporation is the continuing<br>or successor Corporation) of evidences of indebtedness, cash (other than an Annual Cash Dividend or a dividend referred to in Section 2.3(a)(i), but including any dividend payable in securities other than Common Shares), assets or rights,<br>options or warrants (excluding those referred to in Section 2.3(b) hereof), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a<br>fraction:
(i)	the numerator of which shall be the Market Price per Common Share on such record date, less the fair market<br>value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of Rights), on a per share basis, of the portion<br>of the cash, assets, evidences of indebtedness, rights, options or warrants so to be distributed; and
---	---
(ii)	the denominator of which shall be such Market Price per Common Share.
---	---

24 -

Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such a distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price which would have been in effect if such record date had not been fixed.

(d)	Notwithstanding anything herein to the contrary, no adjustment in the Exercise Price shall be required<br>unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price; provided, however, that any adjustments which by reason of this Section 2.3(d) are not required to be made shall be carried forward and taken<br>into account in any subsequent adjustment. All calculations under Section 2.3 shall be made to the nearest cent or to the nearest ten-thousandth of a share. Notwithstanding the first sentence of this<br>Section 2.3(d), any adjustment required by Section 2.3 shall be made no later than the earlier of:
(i)	(i) three years from the date of the transaction which gives<br>rise to such adjustment; or
---	---
(ii)	the Expiration Time.
---	---
(e)	In the event West Fraser shall at any time after the Record Time and prior to the Separation Time issue any<br>shares of capital stock (other than Common Shares), or rights, options or warrants to subscribe for or purchase any such capital stock, or securities convertible into or exchangeable for any such capital stock in a transaction referred to in<br>Sections 2.3(a)(i) or (iv) above, if the Board of Directors acting in good faith determines that the adjustments contemplated by Sections 2.3(a), (b) and (c) above in connection with such transaction will not appropriately protect the<br>interests of the holders of Rights, the Board of Directors may determine what other adjustments to the Exercise Price, number of Rights and/or securities purchasable upon exercise of Rights would be appropriate and, notwithstanding<br>Sections 2.3(a), (b) and (c) above, such adjustments, rather than the adjustments contemplated by Sections 2.3(a), (b) and (c) above, shall be made, subject to the prior consent of the holders of the Voting Shares or the Rights<br>as set forth in Section 5.4(b) or (c), and West Fraser and the Rights Agent shall have authority upon receiving such prior consent of the holders of the Voting Shares to amend this Agreement as appropriate to provide for such adjustments.<br>
---	---
(f)	Each Right originally issued by West Fraser subsequent to any adjustment made to the Exercise Price<br>hereunder shall evidence the right to purchase, at the Adjusted Exercise Price, the number of Common Shares purchasable from time to time hereunder upon exercise of a Right immediately prior to such issue, all subject to further adjustment as<br>provided for herein.
---	---
(g)	Irrespective of any adjustment or change in the Exercise Price or the number of Common Shares issuable upon<br>the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Exercise Price per Common Share and the number of Common Shares which were expressed in the initial Rights Certificates issued<br>hereunder.
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(h)	In any case in which this Section 2.3 shall require that an adjustment in the Exercise Price be made<br>effective as of a record date for a specified event, West Fraser may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Common Shares and other securities of West<br>Fraser, if
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25 -

any, issuable upon such exercise over and above the number of Common Shares and other securities of West<br>Fraser, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that West Fraser shall deliver to such holder an appropriate instrument evidencing such holder’s right to<br>receive such additional shares (fractional or otherwise) or other securities upon the occurrence of the event requiring such adjustment.
(i)	Notwithstanding anything contained in this Section 2.3 to the contrary, West Fraser shall be entitled<br>to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this Section 2.3, as and to the extent that in their good faith judgment the Board of Directors shall determine to be advisable, with the<br>intent that any:
---	---
(i)	consolidation or subdivision of Common Shares;
---	---
(ii)	issuance (wholly or in part for cash) of Common Shares or securities that by their terms are convertible<br>into or exchangeable for Common Shares;
---	---
(iii)	stock dividends; or
---	---
(iv)	issuance of rights, options or warrants referred to in this Section 2.3,
---	---

hereafter made by West Fraser to holders of its Common Shares, subject to applicable taxation laws, shall not be taxable to such shareholders or shall subject such shareholders to a lesser amount of tax.

(j)	If, as a result of an adjustment made pursuant to Section 3.1, the holder of any Right thereafter<br>exercised shall become entitled to receive any securities other than Common Shares, thereafter the number of such other securities so receivable upon exercise of any Right and the applicable Exercise Price thereof shall be subject to adjustment from<br>time to time in a manner and on terms as nearly equivalent as may be practicable to the provisions with respect to the Common Shares contained in the foregoing subsections of this Section 2.3 and the provisions of this Agreement with respect to<br>the Common Shares shall apply on like terms to any such other securities.
(k)	Whenever an adjustment to the Exercise Price or a change in the securities purchasable upon the exercise of<br>Rights is made pursuant to this Section 2.3, West Fraser shall promptly:
---	---
(i)	prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such<br>adjustment;
---	---
(ii)	file with the Rights Agent and with each transfer agent for the Common Shares a copy of such certificate;<br>and
---	---
(iii)	cause notice of the particulars of such adjustment or change to be given to the holders of the Rights.<br>
---	---

Failure to file such certificate or to cause such notice to be given as aforesaid, or any defect therein, shall not affect the validity of any such adjustment or change.

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2.4	Date on Which Exercise Is Effective

Each Person in whose name a registration in Book Entry Form for Common Shares or other securities, if applicable, is made upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Common Shares or other securities, if applicable, represented thereon, and such registration shall be dated the date upon which the Rights Certificate evidencing such Rights was duly surrendered in accordance with Section 2.2(d) (together with a duly completed Election to Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and other governmental charges payable by the exercising holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the Common Share transfer books of West Fraser are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Common Share transfer books of West Fraser are open.

2.5	Execution, Authentication, Delivery and Dating of Rights Certificates

Rights will be evidenced, in the case of Rights in Book Entry Form, by a statement issued under the Rights Agent’s direct registration system, or alternatively, if West Fraser determines to issue Rights Certificates, by the following procedures:

(a)	The Rights Certificates shall be executed on behalf of West Fraser by any two directors or officers of West<br>Fraser. The signature of any of these directors or officers on the Rights Certificates may be manual or mechanically or electronically reproduced. Rights Certificates bearing the manual or mechanically or electronically reproduced signatures of<br>individuals who were at any time the proper officers or directors of West Fraser shall bind West Fraser, notwithstanding that such individuals or any of them have ceased to hold such offices either before or after the countersignature and delivery<br>of such Rights Certificates.
(b)	Promptly after West Fraser learns of the Separation Time, West Fraser will notify the Rights Agent in<br>writing of such Separation Time and will deliver the Rights Certificates executed by West Fraser to the Rights Agent for countersignature, as well as the disclosure statements describing the Rights, and the Rights Agent shall countersign (in a<br>manner satisfactory to West Fraser) and send such Rights Certificates and disclosure statements to the holders of the Rights pursuant to Section 2.2(c) hereof. No Rights Certificate shall be valid for any purpose until countersigned by the<br>Rights Agent as aforesaid.
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(c)	Each Rights Certificate shall be dated the date of countersignature thereof.
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2.6	Registration, Transfer and Exchange
---	---
(a)	West Fraser will cause to be kept a register (the “Rights Register”) in which, subject to<br>such reasonable regulations as it may prescribe, West Fraser will provide for the registration and transfer of Rights. The Rights Agent is hereby appointed registrar for the Rights (the “Rights Registrar”) for the purpose of<br>maintaining the Rights Register for West Fraser and registering Rights and transfers of Rights as herein provided and the Rights Agent hereby accepts such appointment. In the event that the Rights Agent shall cease to be the Rights Registrar, the<br>Rights Agent will have the right to examine the Rights Register at all reasonable times.
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After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, and subject to the provisions of Section 2.6(c), West Fraser will execute, and the Rights Agent will countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered. Alternatively, in the case of the exercise of Rights in Book Entry Form, the Rights Agent shall provide the holder or the designated transferee or the transferees with one or more statements issued under the Rights Agent’s direct registration system evidencing the same aggregate number of Rights as did the direct registration system’s records for the Rights transferred or exchanged.

(b)	All Rights issued upon any registration of transfer or exchange of Rights Certificates shall be the valid<br>obligations of West Fraser, and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of transfer or exchange.
(c)	Every Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be<br>accompanied by a written instrument of transfer in form satisfactory to West Fraser or the Rights Agent, as the case may be, duly executed by the holder thereof or such holder’s attorney duly authorized in writing. As a condition to the<br>issuance of any new Rights Certificate under this Section 2.6, West Fraser may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the<br>reasonable fees and expenses of the Rights Agent) connected therewith.
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(d)	West Fraser shall not be required to register the transfer or exchange of any Rights after the Rights have<br>been terminated pursuant to the provisions of this Agreement.
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2.7	Mutilated, Destroyed, Lost and Stolen Rights Certificates
---	---
(a)	If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, West<br>Fraser shall execute and the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so surrendered.
---	---
(b)	If there shall be delivered to West Fraser and the Rights Agent prior to the Expiration Time:<br>
---	---
(i)	evidence to their reasonable satisfaction of the destruction, loss or theft of any Rights Certificate; and<br>
---	---
(ii)	such security or indemnity as may be reasonably required by them to save each of them and any of their<br>agents harmless,
---	---

then, in the absence of notice to West Fraser or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, West Fraser shall execute and upon West Fraser’s request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen.

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(c)	As a condition to the issuance of any new Rights Certificate under this Section 2.7, West Fraser may<br>require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Rights Agent) connected therewith.<br>
(d)	Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or<br>stolen Rights Certificate shall evidence the contractual obligation of West Fraser, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this<br>Agreement equally and proportionately with any and all other Rights duly issued hereunder.
---	---
2.8	Persons Deemed Owners of Rights
---	---

West Fraser, the Rights Agent and any agent of West Fraser or the Rights Agent may deem and treat the Person in whose name a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes whatsoever. As used in this Agreement, unless the context otherwise requires, the term “holder” of any Rights shall mean the registered holder of such Rights (or, prior to the Separation Time, of the associated Common Share).

2.9	Delivery and Cancellation of Certificates

All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. West Fraser may at any time deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which West Fraser may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the Rights Agent. No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates cancelled as provided in this Section 2.9, except as expressly permitted by this Agreement. The Rights Agent shall, subject to applicable laws, destroy all cancelled Rights Certificates and deliver a certificate of destruction to West Fraser on request.

2.10	Agreement of Rights Holders

Every holder of Rights, by accepting the same, consents and agrees with West Fraser and the Rights Agent and with every other holder of Rights:

(a)	to be bound by and subject to the provisions of this Agreement, as amended from time to time in accordance<br>with the terms hereof, in respect of all Rights held;
(b)	that prior to the Separation Time, each Right will be transferable only together with, and will be<br>transferred by a transfer of, the associated Common Share certificate representing such Right;
---	---
(c)	that after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as<br>provided herein;
---	---
(d)	that prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated<br>Common Share certificate, or if no certificate evidences the Common Share registration, satisfactory evidence of the associated Common Share registration) for registration of transfer, West Fraser, the Rights Agent and any agent of West Fraser or<br>
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29 -

the Rights Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the<br>Separation Time, the associated Common Share certificate, or if no certificate evidences the Common Share registration, satisfactory evidence of the associated Common Share registration) is registered as the absolute owner thereof and of the Rights<br>evidenced thereby (notwithstanding any notations of ownership or writing on such Rights Certificate or the associated Common Share certificate made by anyone other than West Fraser or the Rights Agent) for all purposes whatsoever, and neither West<br>Fraser nor the Rights Agent shall be affected by any notice to the contrary;
(e)	that such holder of Rights has waived his right to receive any fractional Rights or any fractional shares or<br>other securities upon exercise of a Right (except as provided herein);
---	---
(f)	that without the approval of any holder of Rights or Voting Shares and upon the sole authority of the Board<br>of Directors acting in good faith, this Agreement may be supplemented or amended from time to time pursuant to Section 5.4(a) and the last sentence of the penultimate paragraph of Section 2.3(a); and
---	---
(g)	that notwithstanding anything in this Agreement to the contrary, neither West Fraser nor the Rights Agent<br>shall have any liability to any holder of a Right or to any other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued<br>by a court of competent jurisdiction or by a government, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise<br>restraining performance of such obligation.
---	---
2.11	Rights Certificate Holder Not Deemed a Shareholder
---	---

No holder, as such, of any Rights or Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever the holder of any Common Share or any other share or security of West Fraser which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed or deemed or confer upon the holder of any Right or Rights Certificate, as such, any right, title, benefit or privilege of a holder of Common Shares or any other shares or securities of West Fraser or any right to vote at any meeting of shareholders of West Fraser whether for the election of directors or otherwise or upon any matter submitted to holders of Common Shares or any other shares of West Fraser at any meeting thereof, or to give or withhold consent to any action of West Fraser, or to receive notice of any meeting or other action affecting any holder of Common Shares or any other shares of West Fraser except as expressly provided herein, or to receive dividends, distributions or subscription rights, or otherwise, until the Right or Rights evidenced by Rights Certificates shall have been duly exercised in accordance with the terms and provisions hereof.

ARTICLE 3

ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

3.1	Flip-in Event
(a)	Subject to Section 3.1(b) and Section 5.1, in the event that prior to the Expiration Time a Flip-in Event shall occur, then:
---	---
(i)	each Right shall constitute, effective at the close of business on the tenth Trading Day (or such longer<br>period as may be required to satisfy the requirements of the
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30 -

Securities Act and any comparable legislation of any other applicable jurisdiction) after the Stock<br>Acquisition Date, the right to purchase from West Fraser, upon exercise of the Right in accordance with the terms of this Agreement, that number of Common Shares having an aggregate Market Price on the date of consummation or occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in<br>Section 2.3 in the event that after the consummation or occurrence or event, an event of a type analogous to any of the events described in Section 2.3 shall have occurred);
(ii)	in the event that there are insufficient authorized but unissued Common Shares to permit each holder of a<br>Right (other than an Acquiring Person or a transferee of the kind described in Section 3.1(b)(ii)) to purchase from West Fraser that number of Common Shares per Right provided for in Section 3.1(a), then until such time as holders of<br>Common Shares approve an increase in West Fraser’s authorized capital such that there are sufficient authorized but unissued Common Shares to permit each holder of a Right (other than an Acquiring Person or a transferee of the kind described in<br>Section 3.1(b)(ii)) to purchase from West Fraser that number of Common Shares per Right provided for in Section 3.1(a), each whole Right shall constitute, effective at the close of business on the tenth Trading Day after the Stock<br>Acquisition Date, the right to purchase from West Fraser, upon exercise thereof in accordance with the terms hereof, that number of Common Shares that is equal to one Common Share multiplied by the Adjustment Factor for an amount in cash equal to<br>the Adjusted Exercise Price (such right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 in the event that after the consummation or occurrence or event, an event of a type analogous to<br>any of the events described in Section 2.3 shall have occurred).
---	---
(b)	Notwithstanding anything in this Agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are or were Beneficially owned on or after the earlier of the Separation Time or the Stock Acquisition Date by:
---	---
(i)	an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in<br>concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person); or
---	---
(ii)	a transferee or other successor in title of Rights, directly or indirectly, from an Acquiring Person (or any<br>Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person), where such transferee or successor in title becomes a transferee or successor in<br>title concurrently with or subsequent to the Acquiring Person becoming such in a transfer that the Board of Directors acting in good faith has determined is part of a plan, arrangement or scheme of an Acquiring Person (or any Affiliate or Associate<br>of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Associate or Affiliate of an Acquiring Person), that has the purpose or effect of avoiding Section 3.1(b)(i),
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31 -

shall become null and void without any further action, and any holder of such Rights (including transferees) shall thereafter have no right to exercise such Rights under any provision of this Agreement and further shall thereafter not have any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The holder of any Rights represented by a Rights Certificate which is submitted to the Rights Agent upon exercise or for registration of transfer or exchange which does not contain the necessary certifications set forth in the Rights Certificate establishing that such Rights are not void under this subsection 3.1(b) shall be deemed to be an Acquiring Person for the purposes of this subsection 3.1(b) and such Rights shall be deemed and become null and void.

(c)

From and after the Separation Time, West Fraser shall do all such acts and things as shall be necessary and within its power to ensure compliance with the provisions of Section 3.1, including without limitation, all such acts and things as may be required to satisfy the requirements of the BCBCA, the Securities Act (British Columbia), the Securities Act (Ontario), the U.S. Securities Act, the U.S. Exchange Act and the securities laws or comparable legislation in each of the provinces of Canada and each of the States of the United States in respect of the issue of Common Shares upon the exercise of Rights in accordance with this Agreement.

(d)

Any Rights Certificate that would represent Rights Beneficially owned by a Person described in either Section 3.1(b)(i) or (ii) or transferred to any nominee of any such Person, and any Rights Certificate that would be issued upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall either not be issued upon the instruction of West Fraser in writing to the Rights Agent or contain the following legend:

---

The Rights represented by this Rights Certificate were issued to a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such terms are defined in the Shareholder Rights Plan Agreement) or a Person who was acting jointly or in concert with an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Shareholder Rights Plan Agreement). This Rights Certificate and the Rights represented hereby are void or shall become void in the circumstances specified in Section 3.1(b) of the Shareholder Rights Plan Agreement.

provided, however, that the Rights Agent shall not be under any responsibility to ascertain the existence of facts that would require the imposition of such legend but shall impose such legend only if instructed to do so by West Fraser in writing or if a holder fails to certify upon transfer or exchange in the space provided on the Rights Certificate that such holder is not a Person described in such legend. The issuance of a Rights Certificate without the legend referred to in this Section 3.1(d) shall be of no effect on the provisions of Section 3.1(b).

Any Rights issued and registered in Book Entry Form (that are evidenced by an advice or other statement on which are maintained electronically the records of the transfers) after the Separation Time but prior to the Expiration Time, shall evidence one Right for each Right represented by such registration and the registration record of such Rights

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shall include the legend set forth in this Section 3.1(d), adapted accordingly as the Rights Agent may reasonably require.

ARTICLE 4

THE RIGHTS AGENT

4.1	General
(a)	West Fraser hereby appoints the Rights Agent to act as agent for West Fraser and the holders of the Rights<br>in accordance with the terms and conditions of this Agreement, and the Rights Agent hereby accepts such appointment. West Fraser may from time to time appoint one or more co-Rights Agents (“Co-Rights Agents”) as it may deem necessary or desirable, subject to the approval of the Rights Agent, acting reasonably. In the event West Fraser appoints one or more<br>Co-Rights Agents, the respective duties of the Rights Agent and Co-Rights Agents shall be as West Fraser may determine with the approval of the Rights Agent and the Co-Rights Agents.
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(b)	West Fraser agrees to pay the Rights Agent reasonable compensation for all services rendered by it hereunder<br>or otherwise agreed to with West Fraser in writing and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements reasonably incurred in the execution and administration of this Agreement and<br>the exercise and performance of its duties thereunder (including the reasonable fees and other disbursements of any expert retained by the Rights Agent with the approval of West Fraser, such approval not to be unreasonably withheld). West Fraser<br>also agrees to indemnify the Rights Agent and its affiliates, and each of their officers, directors, employees and agents for, and to hold them harmless against, any loss, liability, cost, claim, action, damage or expense, incurred without<br>negligence, bad faith or wilful misconduct on the part of the Rights Agent, its affiliates, or either of its officers, directors, employees, or agents for anything done or omitted by the Rights Agent in connection with the acceptance, execution and<br>administration of this Agreement and the exercise and performance of its duties hereunder, including legal costs and expenses of defending against any claims or liability, which right to indemnification will survive the termination of this Agreement<br>or the resignation or removal of the Rights Agent.
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(c)	The Rights Agent shall be protected from and shall incur no liability for or in respect of any action taken,<br>suffered or omitted by it in connection with its administration of this Agreement in reliance upon any certificate for Common Shares, Rights Certificate, certificate for other securities of West Fraser, instrument of assignment or transfer, power of<br>attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, opinion, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper<br>Person or Persons.
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(d)	West Fraser shall inform the Rights Agent in a reasonably timely manner of events which may materially<br>affect the administration of this Agreement by the Rights Agent and, at any time upon request, shall provide to the Rights Agent an incumbency certificate certifying the then current directors and officers of West Fraser; provided that failure to<br>inform the Rights Agent of any such events, or any defect therein, shall not affect the validity of any action taken hereunder in relation to such events.
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4.2	Merger, Amalgamation or Consolidation or Change of Name of Rights Agent
(a)	Any company into which the Rights Agent or any successor Rights Agent may be merged or amalgamated or with<br>which it may be consolidated, or any company resulting from any merger, amalgamation, statutory arrangement or consolidation to which the Rights Agent or any successor Rights Agent is a party, or any company succeeding to the securityholder services<br>business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such<br>company would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4 hereof. In case at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Rights Certificates<br>have been countersigned but not delivered, any successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates have<br>not been countersigned, any successor Rights Agent may countersign such Rights Certificates in the name of either the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the<br>full force provided in the Rights Certificates and in this Agreement.
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(b)	In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates<br>shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been<br>countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this<br>Agreement.
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4.3	Duties of Rights Agent
---	---

The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, all of which West Fraser and the holders of certificates for Common Shares and Rights Certificates, by their acceptance thereof, shall be bound.

(a)

The Rights Agent, at the expense of West Fraser, may retain and consult with legal counsel (who may be legal counsel for West Fraser and, in any event, shall be a reputable legal firm) and the opinion of such counsel will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion and the Rights Agent may also consult with such other experts as the Rights Agent shall consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement (at West Fraser’s expense) and the Rights Agent shall be entitled to act and rely in good faith on the advice of any such expert.

(b)

Whenever in the performance of its duties under this Agreement, the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by West Fraser prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by two Persons believed by the Rights Agent to be directors or officers of West Fraser and delivered to the Rights Agent; and such certificate will be full authorization to the Rights Agent for any action

---

34 -

taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such<br>certificate.
(c)	The Rights Agent will be liable hereunder only for events which are the result of its own negligence, bad<br>faith or wilful misconduct and that of its officers, directors and employees.
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(d)	The Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained<br>in this Agreement (except as such are made or provided by the Rights Agent) or in the certificates for Common Shares or the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and<br>recitals are and will be deemed to have been made by West Fraser only.
---	---
(e)	The Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the<br>execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any certificate for a Common Share or Rights Certificate (except its countersignature<br>thereof); nor will it be responsible for any breach by West Fraser of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the<br>Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment required under the provisions of Section 2.3 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of<br>facts that would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by Section 2.3 describing any such adjustment); nor will it by any act hereunder be deemed to make any<br>representation or warranty as to the authorization of any Common Shares to be issued pursuant to this Agreement or any Rights or as to whether any Common Shares will, when issued, be duly and validly authorized, executed, issued and delivered and<br>fully paid and non-assessable.
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(f)	Each of West Fraser and the Rights Agent agrees that it will perform, execute, acknowledge and deliver or<br>cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing of the provisions of this Agreement.<br>
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(g)	The Rights Agent is hereby authorized and directed to accept instructions in writing (including by e-mail) with respect to the performance of its duties hereunder from any individual believed by the Rights Agent to be any two officers or directors of West Fraser, and to apply to such individuals for advice or<br>instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such individual. It is understood that instructions to the Rights Agent shall, except<br>where circumstances make it impractical or the Rights Agent otherwise agrees, be given in writing (including by e-mail) and, where not in writing, such instructions shall be confirmed in writing (including by e-mail) as soon as practicable after the giving of such instructions.
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(h)	The Rights Agent and any shareholder or stockholder, director, officer or employee of the Rights Agent may<br>buy, sell or deal in Common Shares, Rights or other securities of West Fraser or become financially interested in any transaction in which West Fraser may be interested, or contract with or lend money to West Fraser or otherwise act as fully and<br>
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35 -

freely as though it were not the Rights Agent under this Agreement. Nothing herein shall preclude the Rights<br>Agent from acting in any other capacity for West Fraser or for any other legal entity, provided such actions would not place the Rights Agent in a position of conflict of interest with respect to its duties under this Agreement.<br>
(i)	The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any<br>duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to West Fraser<br>resulting from any such act, omission, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.
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4.4	Change of Rights Agent
---	---

The Rights Agent may resign and be discharged from its duties under this Agreement upon 60 days’ notice (or such lesser notice as is acceptable to West Fraser) in writing mailed to West Fraser and to each transfer agent of Common Shares by registered or certified mail. West Fraser may remove the Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent and to each transfer agent of the Common Shares by registered or certified mail. If the Rights Agent should resign or be removed or otherwise become incapable of acting, West Fraser will appoint a successor to the Rights Agent. If West Fraser fails to make such appointment within a period of 60 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent, then by prior written notice to West Fraser the resigning or incapacitated Rights Agent (at West Fraser’s expense) or the holder of any Rights (which holder shall, with such notice, submit such holder’s Rights Certificate, if any, for inspection by West Fraser), may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by West Fraser or by such a court, shall be a company constituted under the laws of Canada or a province thereof authorized to carry on the business of a trust company in the Province of British Columbia. After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent, upon the receipt of all outstanding fees and expenses, shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, West Fraser will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares, and mail a notice thereof in writing to the holders of the Rights in accordance with Section 5.9. The cost of giving any notice required under this Section 4.4 shall be borne solely by West Fraser. Failure to give any notice provided for in this Section 4.4, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of any successor Rights Agent, as the case may be.

4.5	Compliance with Anti-Money Laundering Legislation

The Rights Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Rights Agent reasonably determines that such an act might cause it to be in non-compliance with any sanctions legislation or regulation or applicable anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the Rights Agent reasonably determine at any time that its acting under this Agreement has resulted in it being in non-compliance with any sanctions legislation or regulation or applicable anti-money laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to resign on 10 days’ prior written notice to West Fraser, provided: (i) that the Rights Agent’s written notice shall describe the circumstances of such non-compliance to the extent permitted by any sanctions legislation or regulation or applicable anti-money

36 -

laundering or anti-terrorist legislation, regulation or guideline; and (ii) that if such circumstances are rectified to the Rights Agent’s satisfaction within such 10-day period, then such resignation shall not be effective. Subject to applicable law, the Rights Agent agrees to notify the Corporation as soon as reasonably possible in the event that the Rights Agent has a reasonable belief that circumstances exist which may give rise to the Rights Agent exercising its right to resign under this paragraph, and such notice shall describe the basis of such reasonable belief.

4.6	Privacy Legislation

The parties acknowledge that Privacy Laws may apply to obligations and activities under this Agreement. Despite any other provision of this Agreement, neither party will take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. West Fraser will, prior to transferring or causing to be transferred personal information to the Rights Agent pursuant to this Agreement, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or will have determined that such consents either have previously been given upon which the parties can rely or are not required under the Privacy Laws. The Rights Agent will use commercially reasonable efforts to ensure that its services hereunder comply with Privacy Laws.

4.7	Liability

Notwithstanding any other provision of this Agreement, and whether such losses or damages are foreseeable or unforeseeable, the Rights Agent shall not be liable under any circumstances whatsoever for any (a) breach by any other party of securities law or other rule of any securities regulatory authority, (b) lost profits or (c) special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages. This Section 4.7 shall survive the termination of this Agreement or the resignation or removal of the Rights Agent.

ARTICLE 5

MISCELLANEOUS

5.1	Redemption and Waiver
(a)	The Board of Directors shall waive the application of Section 3.1 in respect of the occurrence of any Flip-in Event if the Board of Directors has determined, following a Stock Acquisition Date and prior to the Separation Time, that a Person became an Acquiring Person by inadvertence and without any intention to<br>become, or knowledge that it would become, an Acquiring Person under this Agreement and, in the event that such a waiver is granted by the Board of Directors, such Stock Acquisition Date shall be deemed not to have occurred. Any such waiver pursuant<br>to this Section 5.1(a) must be on the condition that such Person, within 14 days after the foregoing determination by the Board of Directors or such earlier or later date as the Board of Directors may determine (the “DispositionDate”), has reduced its Beneficial ownership of Voting Shares such that the Person is no longer an Acquiring Person. If the Person remains an Acquiring Person at the close of business on the Disposition Date, the Disposition Date shall be<br>deemed to be the date of occurrence of a further Stock Acquisition Date and Section 3.1 shall apply thereto.
---	---
(b)	The Board of Directors acting in good faith may, prior to a Flip-in<br>Event having occurred, upon prior written notice delivered to the Rights Agent, determine to waive the application of Section 3.1 to a Flip-in Event that may occur by reason of a Take-over Bid made by<br>means of a take-over bid circular to all holders of record of Voting Shares (which
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37 -

for greater certainty shall not include the circumstances described in Section 5.1(a)), provided that if<br>the Board of Directors waives the application of Section 3.1 to a particular Flip-in Event pursuant to this Section 5.1(b), the Board of Directors shall be deemed to have waived the application of<br>Section 3.1 to any other Flip-in Event occurring by reason of any Take-over Bid which is made by means of a Take-over Bid circular to all holders of Voting Shares prior to the expiry of any Take-over Bid<br>(as the same may be extended from time to time) in respect of which a waiver is, or is deemed to have been granted under this Section 5.1(b).
(c)	In the event that prior to the occurrence of a Flip-in Event a<br>Person acquires, pursuant to a Permitted Bid, a Competing Permitted Bid or an Exempt Acquisition under Section 5.1(b), outstanding Voting Shares, then the Board of Directors shall, immediately upon the consummation of such acquisition without<br>further formality be deemed to have elected to redeem the Rights at a redemption price of $0.00001 per Right appropriately adjusted in a manner analogous to the applicable adjustment provided for in Section 2.3 if an event of the type analogous<br>to any of the events described in Section 2.3 shall have occurred (such redemption price being herein referred to as the “Redemption Price”).
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(d)	The Board of Directors may, with the prior approval of the holders of Voting Shares or Rights given in<br>accordance with the terms of Section 5.4, at any time prior to the occurrence of a Flip-in Event elect to redeem all but not less than all of the then outstanding Rights at the Redemption Price<br>appropriately adjusted in a manner analogous to the applicable adjustments provided for in Section 2.3, which adjustments shall only be made in the event that an event of the type analogous to any of the events described in Section 2.3<br>shall have occurred.
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(e)	The Board of Directors may, with the prior approval of the holders of Common Shares given in accordance with<br>Section 5.4 at any time prior to the occurrence of a Flip-in Event as to which the application of Section 3.1 hereof has not been waived pursuant to Section 5.1(a), if such Flip-in Event would occur by reason of an acquisition of Common Shares or Convertible Securities otherwise than pursuant to a Take-over Bid made by means of a Take-over Bid circular to all registered holders of<br>Common Shares and otherwise than in the circumstances set forth in Section 5.1(a), waive the application of Section 3.1 to such Flip-in Event. In such event, the Board of Directors shall extend the<br>Separation Time to a date at least ten (10) Business Days subsequent to the meeting of shareholders called to approve such waiver.
---	---
(f)	The Board of Directors may, prior to the close of business on the tenth Trading Day following a Stock<br>Acquisition Date or such later Business Day as they may from time to time determine, upon prior written notice delivered to the Rights Agent, waive the application of Section 3.1 to the related Flip-in<br>Event, provided that the Acquiring Person has reduced its Beneficial ownership of Voting Shares (or has entered into a contractual arrangement with West Fraser, acceptable to the Board of Directors, to do so within 10 calendar days of the date on<br>which such contractual arrangement is entered into or such other date as the Board of Directors may have determined) such that at the time the waiver becomes effective pursuant to this Section 5.1(f) such Person is no longer an Acquiring<br>Person. In the event of such a waiver becoming effective prior to the Separation Time, for the purposes of this Agreement, such Flip-in Event shall be deemed not to have occurred.
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(g)	Where a Take-over Bid that is not a Permitted Bid or a Competing Permitted Bid is withdrawn or otherwise<br>terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the outstanding Rights at the Redemption Price. Notwithstanding<br>the foregoing, upon the Rights being redeemed pursuant to this Section 5.1(g), all the provisions of this Agreement shall continue to apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights<br>held by each holder of record of Common Shares as of the Separation Time had not been mailed to each such holder and for all purposes of this Agreement the Separation Time shall be deemed not to have occurred and the Rights shall remain attached to<br>outstanding Common Shares subject to and in accordance with this agreement.
(h)	If the Board of Directors is deemed under Section 5.1(c) to have elected or elects under Sections<br>5.1(d) or (g) to redeem the Rights, the right to exercise the Rights will thereupon, without further action and without notice, terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.<br>
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(i)	Within 10 calendar days after the Board of Directors is deemed under Section 5.1(c) to have elected or<br>elects under Section 5.1(d) or (g) to redeem the Rights, West Fraser shall give notice of redemption to the holders of the then outstanding Rights by mailing such notice to each such holder at his last address as it appears upon the<br>registry books of the Rights Agent or, prior to the Separation Time, on the registry books of the transfer agent for the Voting Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder<br>receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.
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(j)	West Fraser shall give prompt written notice to the Rights Agent of any waiver of the application of<br>Section 3.1 pursuant to this Section 5.1.
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5.2	Expiration
---	---

No Person shall have any rights whatsoever pursuant to this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in Section 4.1(a) of this Agreement.

5.3	Issuance of New Rights Certificates

Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, West Fraser may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board of Directors to reflect any adjustment or change in the number or kind or class of securities purchasable upon exercise of Rights made in accordance with the provisions of this Agreement.

5.4

Supplements and Amendments

(a)

West Fraser may, prior to the date of the shareholders’ meeting referred to in the first paragraph of Section 5.15 supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights without the approval of any holders of Rights or Voting Shares in order to make any changes which the Board of Directors acting in good faith may deem necessary or desirable. West Fraser may make any amendments to this Agreement to correct any clerical or typographical error or which, subject to Section 5.4(f), are required to maintain the validity of the Agreement as a result of any change in

---

39 -

any applicable legislation, regulations or rules thereunder. Notwithstanding anything in this Section 5.4<br>to the contrary, no amendment shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent to such supplement or amendment.
(b)	Subject to Section 5.4(a), West Fraser may, with the prior consent of the holders of Voting Shares<br>obtained as set forth below, at any time before the Separation Time, amend, vary or rescind any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights<br>generally), provided that no such amendment, variation or deletion shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent thereto. Such consent shall be deemed to have been given if provided by the<br>holders of Voting Shares at a meeting of West Fraser shareholders called and held in compliance with applicable laws and regulatory requirements and the requirements in the notice of articles and the articles of West Fraser. Subject to compliance<br>with any requirements imposed by the foregoing, consent shall be given if the proposed amendment, variation or rescission is approved by the affirmative vote of a majority of the votes cast by all holders of Voting Shares (other than any holder who<br>does not qualify as an Independent Shareholder, with respect to all Voting Shares Beneficially owned by such Person), represented in person or by proxy at the shareholder meeting.
---	---
(c)	West Fraser may, with the prior consent of the holders of Rights obtained as set forth below, at any time<br>after the Separation Time and before the Expiration Time, amend, vary or rescind any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally),<br>provided that no such amendment, variation or rescission shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent thereto. Such consent shall be deemed to have been given if provided by the holders of<br>Rights at a Rights Holders’ Special Meeting, which Rights Holders’ Special Meeting shall be called and held in compliance with applicable laws and regulatory requirements and, to the extent possible, with the requirements in the notice of<br>articles and the articles of West Fraser applicable to meetings of holders of Common Shares, applied mutatis mutandis. Subject to compliance with any requirements imposed by the foregoing, consent shall be given if the proposed amendment, variation<br>or rescission is approved by the affirmative vote of a majority of the votes cast by holders of Rights (other than holders of Rights whose Rights have become null and void pursuant to Section 3.1(b)), represented in person or by proxy at the<br>Rights Holders’ Special Meeting.
---	---
(d)	Any consent or approval of the holders of Rights shall be deemed to have been given if the action requiring<br>such approval is authorized by the affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders of Rights and representing a majority of the votes cast in respect thereof. For the purposes<br>hereof, each outstanding Right (other than Rights which are null and void pursuant to the provisions hereof) shall be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be,<br>which are provided in West Fraser’s notice of articles and articles and the BCBCA with respect to the meetings of holders of Common Shares.
---	---
(e)	The Corporation shall be required to provide the Rights Agent with notice in writing of any such amendment,<br>variation or deletion to this Agreement as referred to in this Section 5.4 within five days of effecting such amendment, variation or deletion.
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40 -

(f)	Any amendments, variations or deletions made by West Fraser to this Agreement pursuant to<br>Section 5.4(a) which are required to maintain the validity of this Agreement as a result of any change in any applicable legislation, regulation or rule thereunder shall:
(i)	if made before the Separation Time, be submitted to the holders of Voting Shares at the next meeting of<br>shareholders and the holders of Voting Shares may, by the majority referred to in Section 5.4(b) confirm or reject such amendment;
---	---
(ii)	if made after the Separation Time, be submitted to the holders of Rights at a meeting to be called for on a<br>date not later than immediately following the next meeting of shareholders of West Fraser and the holders of Rights may, by resolution passed by the majority referred to in Section 5.4(d) confirm or reject such amendment.
---	---

Any such amendment shall be effective from the date of the resolution of the Board of Directors adopting such amendment, until it is confirmed or rejected or until it ceases to be effective (as described in the next sentence) and, where such amendment is confirmed, it continues in effect in the form so confirmed. If such amendment is rejected by the shareholders or the holders of Rights or is not submitted to the shareholders or holders of Rights as required, then such amendment shall cease to be effective from and after the termination of the meeting at which it was rejected or to which it should have been but was not submitted or from and after the date of the meeting of holders of Rights that should have been but was not held, and no subsequent resolution of the Board of Directors to amend this Agreement to substantially the same effect shall be effective until confirmed by the shareholders or holders of Rights as the case may be.

5.5	Fractional Rights and Fractional Shares
(a)	West Fraser shall not be required to issue fractions of Rights or to distribute Rights Certificates which<br>evidence fractional Rights and West Fraser shall not be required to pay any amount to a holder of record of Rights Certificates in lieu of such fractional Rights.
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(b)	West Fraser shall not be required to issue fractions of Common Shares upon exercise of Rights or to<br>distribute certificates which evidence fractional Common Shares. In lieu of issuing fractional Common Shares, West Fraser shall be entitled to pay to the registered holders of Rights Certificates, at the time such Rights are exercised as herein<br>provided, an amount in cash equal to the fraction of the Market Price of one Common Share that the fraction of a Common Share that would otherwise be issuable upon the exercise of such Right is of one whole Common Share at the date of such exercise.<br>
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5.6	Rights of Action
---	---

Subject to the terms of this Agreement, all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective holders of the Rights. Any holder of Rights, without the consent of the Rights Agent or of the holder of any other Rights, may, on such holder’s own behalf and for such holder’s own benefit and the benefit of other holders of Rights, enforce, and may institute and maintain any suit, action or proceeding against West Fraser to enforce such holder’s right to exercise such holder’s Rights, or Rights to which such holder is entitled, in the manner provided in such holder’s Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holder of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of

41 -

the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement.

5.7	Regulatory Approvals

Any obligation of West Fraser or action or event contemplated by this Agreement shall be subject to the receipt of any requisite approval or consent from any governmental or regulatory authority, and without limiting the generality of the foregoing, necessary approvals of any stock exchange having been obtained be obtained, such as approvals relating to the issuance of Common Shares upon the exercise of Rights under Section 2.2(d).

5.8	Declaration as to Foreign Holders

If in the opinion of the Board of Directors (who may rely upon the advice of counsel) any action or event contemplated by this Agreement would require compliance by West Fraser with the securities laws or comparable legislation of a jurisdiction outside Canada, the Board of Directors acting in good faith shall take such actions as it may deem appropriate to ensure such compliance. In no event shall West Fraser or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to persons who are citizens, residents or nationals of any jurisdiction other than Canada or the United States, in which such issue or delivery would be unlawful without registration of the relevant Persons or securities for such purposes.

5.9

Notices

(a)

Notices or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the holder of any Rights to or on West Fraser shall be sufficiently given or made if delivered, sent by registered or certified mail, postage prepaid (until another address is filed in writing with the Rights Agent), or sent by facsimile or other form of recorded electronic communication (including e-mail), charges prepaid and confirmed in writing, as follows:

---

West Fraser Timber Co. Ltd.

c/o West Fraser Group

885 West Georgia Street, Suite 1500

Vancouver, BC

Canada

V6C 3E8

Attention: Chris Virostek, Senior Vice-President, Finance and Chief Financial

Officer

Facsimile No.: (604) 681-6061

Email: [email protected]

With a copy to: [email protected]

(b)

Notices or demands authorized or required by this Agreement to be given or made by West Fraser or by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if delivered, sent by registered or certified mail, postage prepaid (until another address is filed in writing with West Fraser), or sent by facsimile or other form of recorded electronic communication (including by e-mail to West Fraser’s Senior Vice President and Chief Financial Officer), charges prepaid, and confirmed in writing, as follows:

42 -

Computershare Investor Services Inc.

510 Burrard Street, 3rd Floor

Vancouver, BC

Canada

V6C 3B9

Attention: General Manager, Client services

Facsimile No.: (604) 661-9401

Email: [email protected]

(c)	Notices or demands authorized or required by this Agreement to be given or made by West Fraser or the Rights<br>Agent to or on the holder of any Rights shall be sufficiently given or made if delivered or sent by certified mail, postage prepaid, addressed to such holder at the address of such holder as it appears upon the register of the Rights Agent or, prior<br>to the Separation Time, on the register of West Fraser for its Common Shares. Any notice which is mailed or sent in the manner herein provided shall be deemed given, whether or not the holder receives the notice.
(d)	Any notice given or made in accordance with this Section 5.9 shall be deemed to have been given and to<br>have been received on the day of delivery, if delivered, on the third Business Day (excluding each day during which there exists any general interruption of postal service due to strike, lockout or other cause) following the mailing thereof, if<br>mailed, and on the day of telegraphing, telecopying or sending of the same by other means of recorded electronic communication (provided such sending is during the normal business hours of the addressee on a Business Day and if not, on the first<br>Business Day thereafter). Each of West Fraser and the Rights Agent may from time to time change its address for notice by notice to the other given in the manner aforesaid.
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5.10	Costs of Enforcement
---	---

West Fraser agrees that if it fails to fulfil any of its obligations pursuant to this Agreement, then it will reimburse the holder of any Rights for the costs and expenses (including reasonable legal fees) incurred by such holder to enforce his rights pursuant to any Rights or this Agreement.

5.11	Successors

All the covenants and provisions of this Agreement by or for the benefit of West Fraser or the Rights Agent shall bind and enure to the benefit of their respective successors and permitted assigns hereunder.

5.12	Benefits of this Agreement

Nothing in this Agreement shall be construed to give to any Person other than West Fraser, the Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this Agreement; further, this Agreement shall be for the sole and exclusive benefit of West Fraser, the Rights Agent and the holders of the Rights.

5.13	Governing Law

This Agreement and each Right issued hereunder shall be deemed to be a contract made under the laws of the Province of British Columbia and for all purposes shall be governed by and construed in

43 -

accordance with the laws of such Province applicable to contracts to be made and performed entirely within such Province.

5.14	Severability

If any term or provision hereof or the application thereof to any circumstance shall, in any jurisdiction and to any extent, be invalid or unenforceable, such term or provision shall be ineffective only as to such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction without invalidating or rendering unenforceable or ineffective the remaining terms and provisions hereof in such jurisdiction or the application of such term or provision in any other jurisdiction or to circumstances other than those as to which it is specifically held invalid or unenforceable.

5.15	Effective Date

This Agreement is effective and in full force and effect in accordance with its terms from and after the Effective Date, provided that, if this Agreement has not been confirmed by a majority of the votes cast by Independent Shareholders at the Corporation’s annual general meeting of shareholders in 2020, then this Agreement and any and all outstanding Rights shall terminate and shall be void and of no further force and effect from such time.

This Agreement and all outstanding Rights shall terminate and be void and of no further force and effect on and from the Expiration Time.

This Agreement must be reconfirmed by a resolution passed by a majority of the votes cast by all holders of Voting Shares who vote in respect of such reconfirmation (other than any holder who does not qualify as an Independent Shareholder, with respect to all Voting Shares Beneficially owned by such Person) at the third and sixth annual meetings following West Fraser’s annual general meeting of shareholders in 2020. If this Agreement is not so reconfirmed or is not presented for reconfirmation at such annual meetings, this Agreement and all outstanding Rights shall terminate and be void and of no further force and effect on and from the date of termination of the annual meeting; provided that termination shall not occur if a Flip-in Event has occurred (other than a Flip-in Event which has been waived pursuant to Subsection 5.1(a), 5.1(b), 5.1(e)) prior to the date upon which this Agreement would otherwise terminate pursuant to this Section 5.15.

5.16	Determinations and Actions by the Board of Directors

All actions, calculations and determinations (including all omissions with respect to the foregoing) which are done or made by the Board of Directors for the purposes of this Agreement, in good faith, shall not subject the Board of Directors or any director of West Fraser to any liability to the holders of the Rights.

5.17	Fiduciary Duties of Directors

Nothing contained in this Agreement shall be considered to affect the obligations of the members of the Board of Directors to exercise their fiduciary duties. Without limiting the generality of the foregoing, nothing contained herein shall be construed to suggest or imply that the Board of Directors shall not be entitled to recommend that holders of the Common Shares reject or accept any Take-over Bid or take any other action including, without limitation, the commencement, prosecution, defence or settlement of any litigation and the solicitation of additional or alternative Take-over Bids or other proposals to holders of Common Shares that the Board of Directors believes is necessary or appropriate in the exercise of their fiduciary duties.

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5.18	Time of the Essence

Time shall be of the essence in this Agreement.

5.19	Execution in Counterparts

This Agreement may be executed in any number of counterparts and may be executed and delivered by facsimile or similar electronic copy and each of such counterparts and facsimiles or similar electronic copies shall for all purposes be deemed to be an original, and all such counterparts and facsimiles or similar electronic copies shall together constitute one and the same agreement.

[Remainder of page left blank intentionally]

S-1

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

WEST FRASER TIMBER CO. LTD.
By:
	Name: Chris Virostek
	Title: Senior Vice-President, Finance and Chief Financial Officer
COMPUTERSHARE INVESTOR SERVICES INC.
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By:
	Name: Alexa Kwan
	Title: Relationship Manager
By:
	Name: Anita Basi
	Title: Manager, Emerging Issuer Solutions

S-1

ATTACHMENT 1

WEST FRASER TIMBER CO. LTD.

SHAREHOLDER RIGHTS PLAN AGREEMENT

[Form of Rights Certificate]

Certificate No.<br>	Rights

THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT.UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 3.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR SUCH PERSON’S AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTSAGREEMENT) OR ANY PERSON ACTING JOINTLY OR IN CONCERT WITH THEM OR TRANSFEREES OF ANY OF THE FOREGOING WILL BECOME VOID WITHOUT FURTHER ACTION.

Rights Certificate

This certifies that _________________, or registered assigns, is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Shareholder Rights Plan Agreement, dated April 18, 2023, as the same may be amended or supplemented from time to time, (the “Shareholder Rights Plan Agreement”), between West Fraser Timber Co. Ltd., a company duly incorporated under the laws of British Columbia and Computershare Investor Services Inc., a company governed under the laws of Canada (the “Rights Agent”) (which term shall include any successor Rights Agent under the Shareholder Rights Plan Agreement), to purchase from West Fraser Timber Co. Ltd. at any time after the Separation Time (as such term is defined in the Shareholder Rights Plan Agreement) and prior to the Expiration Time (as such term is defined in the Shareholder Rights Plan Agreement), one fully paid common share of West Fraser Timber Co. Ltd. (a “Common Share”) at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate with the Form of Election to Exercise (in the form provided hereinafter) duly executed and submitted to the Rights Agent at its principal office in the city of Vancouver, British Columbia or any other cities as may be designated by West Fraser Timber Co. Ltd. from time to time. The Exercise Price shall be an amount equal to five times the Market Price (as defined in the Shareholder Rights Agreement) per Common Share determined as of the Separation Time per Right (payable in cash, certified cheque or money order payable to the order of the Corporation) and shall be subject to adjustment as provided in the Shareholder Rights Plan Agreement.

This Rights Certificate is subject to all of the terms and provisions of the Shareholder Rights Plan Agreement, which terms and provisions are incorporated herein by reference and made a part hereof and to which Shareholder Rights Plan Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the

Rights Agent, West Fraser Timber Co. Ltd. and the holders of the Rights Certificates. Copies of the Shareholder Rights Plan Agreement are on file at the registered office of West Fraser Timber Co. Ltd.

This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights equal to the aggregate number

of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Common Shares or of any other securities which may at any time be issuable upon the exercise hereof, nor shall anything contained in the Shareholder Rights Plan Agreement or herein be construed to confer upon the holder hereof, as such, any of the Rights of a shareholder of West Fraser Timber Co. Ltd. or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in the Shareholder Rights Plan Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate shall have been exercised as provided in the Shareholder Rights Plan Agreement.

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

(Signature page follows)

WITNESS the signature of the proper officers of West Fraser Timber Co. Ltd.

Date: ●

WEST FRASER TIMBER CO. LTD.

By:	By:

Countersigned:

COMPUTERSHARE INVESTOR SERVICES INC.

By:
	Authorized Signature

FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the Rights Certificate.)

FOR VALUE RECEIVED _____________________________________________ hereby sells, assigns and transfers unto ________________________________________________________

(Please print name and address of transferee.)

The Rights represented by this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ___________________________________ _________________________________, as attorney, to transfer the within Rights on the books of West Fraser Timber Co. Ltd., with full power of substitution.

Dated:
	Signature
Signature Guaranteed:	(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without<br>alteration or enlargement or any change whatsoever.)
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The signature on this assignment must correspond with the name as written upon the face of the Right Certificate(s), in every particular, without alteration or enlargement, or any change whatsoever and must be guaranteed by a major Canadian Schedule I chartered bank or a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, MSP). The guarantor must affix a stamp bearing the actual words “Signature Guaranteed”. In the USA, signature guarantees must be done by members of a “Medallion Signature Guarantee Program” only. Signature guarantees are not accepted from Treasury Branches, Credit Unions or Caisses Populaires unless they are members of the Stamp Medallion Program.

CERTIFICATE

(To be completed if true.)

The undersigned party transferring Rights hereunder, hereby represents, for the benefit of all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially owned by an Acquiring Person or an Affiliate or Associate thereof or a Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof. Capitalized terms shall have the meaning ascribed thereto in the Shareholder Rights Plan Agreement.

Signature

(To be attached to each Rights Certificate.)

FORM OF ELECTION TO EXERCISE

(To be exercised by the registered holder if such holder desires to exercise the Rights Certificate.)

TO:	WEST FRASER TIMBER CO. LTD. and COMPUTERSHARE INVESTOR SERVICES INC.

The undersigned hereby irrevocably elects to exercise _____________________________ whole Rights represented by the attached Rights Certificate to purchase the Common Shares or other securities, if applicable, issuable upon the exercise of such Rights and requests that certificates for such securities be issued in the name of:

(Name)
(Address)
(City and Province)

Social Insurance Number, Social Security Number, or other taxpayer identification number.

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

(Name)
(Address)
(City and Province)

Social Insurance Number, Social Security Number, or other taxpayer identification number.

Dated:
	Signature
Signature Guaranteed:	(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without<br>alteration or enlargement or any change whatsoever.)
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The signature on this election to exercise must correspond with the name as written upon the face of the Right Certificate(s), in every particular, without alteration or enlargement, or any change whatsoever and must be guaranteed by a major Canadian Schedule I chartered bank or a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, MSP). The guarantor must affix a stamp bearing the actual words “Signature Guaranteed”. In the USA, signature guarantees must be done by members of a “Medallion Signature Guarantee Program” only. Signature guarantees are not accepted from Treasury Branches, Credit Unions or Caisses Populaires unless they are members of the Stamp Medallion Program.

CERTIFICATE

(To be completed if true.)

The undersigned party exercising Rights hereunder, hereby represents, for the benefit of all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially owned by an Acquiring Person or an Affiliate or Associate thereof or a Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof. Capitalized terms shall have the meaning ascribed thereto in the Shareholder Rights Plan Agreement.

Signature

(To be attached to each Rights Certificate.)

NOTICE

In the event the certification set forth above in the Forms of Assignment and Election to Exercise is not completed, West Fraser Timber Co. Ltd. will deem the Beneficial owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof. No Rights Certificates shall be issued in exchange for a Rights Certificate owned or deemed to have been owned by an Acquiring Person or an Affiliate or Associate thereof, or by a Person acting jointly or in concert with an Acquiring Person or an Affiliate or Associate thereof.

EX-99.3

Exhibit 99.3

<br><br><br><br><br> <br><br> <br>8th Floor, 100 University<br>Avenue
Toronto, Ontario M5J 2Y1<br><br><br>www.computershare.com
Security Class<br> <br><br><br><br>Holder Account Number
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Form of Proxy - Annual General and Special Meeting to be held on April 18, 2023
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This Form of Proxy is solicited by and on behalf of Management.<br><br><br><br> <br>Notes to proxy<br><br><br><br> <br>1.Every holder hasthe right to appoint some other person or company of their choice, who need not be a holder, to attend and act on their behalf at the meeting or any adjournment or postponement thereof. If you wish to appoint a person or company other than theManagement Nominees whose names are printed herein, please insert the name of your chosen proxyholder in the space provided (see reverse).<br> <br><br><br><br>2. If the securities are registered in the name of more than one owner (for example, joint<br>ownership, trustees, executors, etc.), then all those registered should sign this proxy. If you are voting on behalf of a corporation or another individual you may be required to provide documentation evidencing your power to sign this proxy with<br>signing capacity stated.<br> <br><br><br><br>3. This proxy should be signed in the exact manner as the name(s) appear(s) on the proxy.<br><br><br><br> <br>4. If a date is not inserted in<br>the space provided on the reverse of this proxy, it will be deemed to bear the date on which it was mailed to the holder by Management.<br> <br><br><br><br>5. The securities represented by this proxy will be voted as directed by the holder, however, ifsuch a direction is not made in respect of any matter, and the proxy appoints the Management Nominees listed on the reverse, this proxy will be voted as recommended by Management.<br><br><br><br> <br>6. The securities represented<br>by this proxy will be voted in favour, or withheld from voting, or voted against each of the matters described herein, as applicable, in accordance with the instructions of the holder, on any ballot that may be called for. If you have specified a<br>choice with respect to any matter to be acted on, the securities will be voted accordingly.<br> <br><br><br><br>7. This proxy confers discretionary authority in respect of amendments or variations to matters<br>identified in the Notice of Meeting and Management Information Circular or other matters that may properly come before the meeting or any adjournment or postponement thereof, unless prohibited by law.
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8. This proxy should be read in conjunction with the accompanying documentation provided<br>by Management.	Fold
Proxies submitted must be received by 11:30 a.m.(Vancouver Time) on April 14, 2023.<br> <br><br> <br>VOTE USINGTHE TELEPHONE OR INTERNET 24 HOURS A DAY 7 DAYS A WEEK!
• Call the number listed BELOW from a touch tone telephone.<br><br><br><br> <br>1-866-732-VOTE (8683) Toll Free	• Go to the following web site: www.investorvote.com<br><br><br><br> <br>• Smartphone?<br><br><br>Scan the QR code to vote now.	• You can enroll to receive future securityholder communications<br>electronically by visiting www.investorcentre.com.
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If you vote by telephone or the Internet, DONOT mail back this proxy.<br> <br><br> <br>Voting by mail<br>may be the only method for securities held in the name of a corporation or securities being voted on behalf of another individual.<br><br><br>Voting by mail or by Internet are the only methods by which a holder may appoint a person as proxyholder other than the<br>Management Nominees named on the reverse of this proxy. Instead of mailing this proxy, you may choose one of the two voting methods outlined above to vote this proxy.<br> <br><br><br><br>To vote by telephone or the Internet, you will need to provide your CONTROL NUMBER listed below.<br><br><br><br> <br>CONTROL NUMBER<br><br><br><br><br><br><br> 01W1EA
Appointment of Proxyholder
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I/We being holder(s) of securities of West Fraser Timber Co. Ltd. (the “Company”) hereby appoint: Hank Ketcham, Chair of the Board, or failing this person, Ray Ferris, President<br>and Chief Executive Officer of the Company (the “Management Nominees”)	OR	Print the name of the person you are appointing if this person is someone other than the Management Nominees listed herein.
		Note: If completing the appointment box above and you or your appointee intend on attending online YOU MUST go to http://www.computershare.com/WestFraserTimber and provide Computershare with the name and emailaddress of the person you are appointing. Computershare will use this information ONLY to provide the appointee with a user name to ask questions at the meeting. If the appointee is attending the meeting in person, this step is NOTrequired.

as my/our proxyholder with full power of substitution and to attend, act and to vote for and on behalf of the holder in accordance with the following direction (or if no directions have been given, as the proxyholder sees fit) and on all other matters that may properly come before the Annual General and Special Meeting of shareholders of the Company to be held at 1250 Brownmiller Road, Quesnel, B.C. on April 18, 2023 at 11:30 a.m. (Vancouver Time) and at any adjournment or postponement thereof.

VOTING RECOMMENDATIONSARE INDICATED BY HIGHLIGHTED TEXT OVER THE BOXES.

							For	Against
1. Number of Directors
To set the number of Directors at 11.							☐	☐
2. Election of Directors	For	Withhold		For	Withhold		For	Withhold
01. Henry H. (Hank) Ketcham	☐	☐	02. Doyle Beneby	☐	☐	03. Reid E. Carter	☐	☐
04. Raymond Ferris	☐	☐	05. John N. Floren	☐	☐	06. Ellis Ketcham Johnson	☐	☐
07. Brian G. Kenning	☐	☐	08. Marian Lawson	☐	☐	09. Colleen M. McMorrow	☐	☐
10. Janice G. Rennie	☐	☐	11. Gillian D. Winckler	☐	☐
				For	Withhold
To elect ALL nominees listed above (except as marked to the contrary)				☐	☐
							For	Withhold
3. Appointment of Auditor
To appoint PricewaterhouseCoopers LLP, as the Auditor of the Company for the ensuing year<br>and to authorize the Directors to fix the Auditor’s remuneration.							☐	☐
							For	Against
4. Advisory “Say on Pay” Resolution
To pass an advisory resolution to approve the Company’s approach to executive compensation, as more particularly<br>described under “Advisory Resolution on the Company’s Approach to Executive Compensation (Say on Pay)” in the accompanying Information Circular.							☐	☐
							For	Against
5. Reconfirmation of the Shareholder Rights Plan
To pass an ordinary resolution to continue, amend and restate the Shareholder<br>Rights Plan, as more particularly described under “Resolution to Reconfirm the Shareholder Rights Plan” in the accompanying Information Circular.							☐	☐
Signature of Proxyholder	Signature(s)	Date
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I/We authorize you to act in accordance with my/our instructions set out above. I/We hereby revoke any proxy previously given<br>with respect to the Meeting. If no voting instructions are indicated above, and the proxy appoints the Management Nominees, this Proxy will be voted as recommended by Management.
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Interim Financial Statements– Mark this box if you would like to receive Interim Financial Statements and accompanying Management’s Discussion and Analysis by mail.	☐	Annual Financial Statements –Mark this box if you would like to receive the Annual Financial Statements and accompanying Management’s Discussion and Analysis by mail.	☐
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If you are not mailing back your proxy, you may register online to receive the above financial report(s) by mail or electronically at www.computershare.com/mailinglist.

W X T Q	3 4 8 6 0 9	A R 1
01W1FG

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EX-99.4

Exhibit 99.4

<br><br><br><br><br> <br><br> <br>Please return completed formto:<br> <br>Computershare<br> <br>8th Floor, 100 University<br>Avenue<br> <br>Toronto, Ontario M5J 2Y1
	Interim Financial Statements	Annual Financial Statements
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	Mark this box if you would like<br>to receive Interim Financial<br>Statements by mail.	Mark this box if you would like<br>to receive the Annual Financial<br>Statements by mail.
Check below if you would like to receive future mailings by e-mail.
	I would like to receive future mailings by e-mail at:

Financial Statements Request Form

Under securities regulations, a reporting issuer must send annually a form to holders to request the Interim Financial Statements and MD&A and/or the Annual Financial Statements and MD&A. If you would like to receive the report(s) by mail, please make your selection and return to the address as noted or register online at www.computershare.com/mailinglist.

Alternatively, you may choose to access the report(s) online at www.sedar.com.

Computershare will use the information collected solely for the mailing of such financial statements. You may view Computershare’s Privacy Code at www.computershare.com/privacy or by requesting that we mail you a copy.

You can enroll to receive future securityholder communications electronically by visiting www.investorcentre.com.

Please place my name on your financial statements mailing list.

Name

LOGO

Apt. Street Number Street Name

LOGO

City

Prov. Postal Code / Zip Code

LOGO

W X T Q	5 1 E T N N

01VZ4B

EX-99.5

Exhibit 99.5

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West Fraser 2022 ANNUAL REPORT

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Table of Contents

West Fraser Operations	1	2022 Annual Management’s Discussion & Analysis	8
Operating Footprint on Two Continents	1	2022 Audited Consolidated Financial Statements	67
Message from Our Chief Executive Officer	2	Directors & Officers	109
2022 Highlights	4	Glossary of Key Terms	110
Financial Performance	6	Corporate Information	111
		Memberships	112
*	Unless otherwise indicated, all financial references are in U.S. dollars.
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LOGO

West Fraser Operations Operating Footprint onTwo Continents 11,000 34 5 6 Employees Lumber Pulp & Renewable Worldwide Mills Newsprint Mills Energy Facilities ENGINEERED WOOD PRODUCT MILLS 14 3 3 2 2 1 OSB1 MDF Plywood Particleboard Veneer & LVL Furniture Plant 1. Excludes currently idled Allendale OSB mill.

2 WEST FRASER

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Message from Our Chief Executive Officer

In our 68-year history at West Fraser, our strategy has remained simple and durable. That is, to be the low-cost producer, and to reinvest in the business while maintaining a prudent balance sheet. This proven and resilient strategy has historically allowed our Company to emerge from market downturns stronger and ready to execute on opportunity. The West Fraser team is experienced in navigating these commodity market cycles, has a proven track record, and is prepared for this cyclicality.

LOGO

Overall, 2022 was a strong year of performance for West Fraser. Robust markets from 2021 carried over into the first half of 2022, followed by slowing demand in the latter part of the year as both inflation and correspondingly rising mortgage rates impacted near-term housing affordability and consumer sentiment.

In 2022, we generated $20.86 of diluted earnings per share and over $3.2 billion of Adjusted EBITDA,^1^ representing a 33% margin. For the full year, we repurchased nearly $2 billion of shares through our normal course issuer bids and a substantial issuer bid. Since early 2021, the Company has repurchased approximately 39.7 million common shares representing about 73% of the shares issued with the Norbord Acquisition. In addition, West Fraser also paid $99 million of dividends in 2022.

West Fraser continues to benefit from the geographic diversity of our high-quality products and our proven track record of capital allocation. As a result, West Fraser closed 2022 with a solid balance sheet while reinvesting nearly $480 million back into the business through capital expenditures.

SAFETY IS OUR TOP PRIORITY

Our approach to safety is to foster a culture of continuous improvement and focus. We achieved a new milestone in 2022 by reducing our most serious injuries by 50% over the previous year, and our lost-time incidents decreased by 5% over 2021. Notwithstanding those successes, our overall rate of recordable injuries plateaued last year – an indication that much work remains to be done to ensure all our people go home safe each day.

ADVANCING SUSTAINABILITY LEADERSHIP

We strive to be a leader in sustainability. Indicative of our sustainability priorities, this last year we realized significant environmental and social achievements. In February, West Fraser became one of the first Canadian forest products companies committed to reduce Scope 1 and 2 emissions targets, aligning to a 1.5 degree scenario, to achieve material GHG reductions by 2030 through the Science Based Targets initiative (SBTi). By year-end, following submission to SBTi, the validation of our emissions reduction targets was underway. Another key accomplishment was joining the United Nations (UN) Global Compact, solidifying our commitment to the UN Sustainable Development Goals (SDGs).

West Fraser’s sustainability performance included new initiatives to improve the diversity of our workforce; work to obtain certification for Progressive Aboriginal Relations (PAR); and a renewed commitment to our communities through our community investments.

1.	Non-GAAP Financial Measure<br>

LOGO

Our employees are the foundation of the Company’s ability to deliver on our strategy, and we believe inclusive and diverse teams build a more vibrant workforce, safer operations, and a stronger company overall. To that end, our new Diversity, Equity & Inclusion Policy was implemented in early 2022, and as a result of this enhanced focus, workforce representation of women and under-represented minorities increased to 15% and 25%, respectively.

As part of our PAR commitment, we implemented a management statement and continued to inform our forest management practices with traditional knowledge.

Our commitment to our communities was renewed with a revised, more robust community investment strategy. Over the year, $4.3 million was distributed to approximately 500 non-profit organizations, making a difference in the communities where we live and work.

NORTH AMERICA’S LEADING SOFTWOOD LUMBER PRODUCER

The world needs sustainable, renewable building materials that sequester carbon in the fight against climate change. West Fraser is well positioned to deliver on projected market demand. In 2022, 54% of West Fraser lumber was produced in the U.S. south, 24% in Alberta and 22% in B.C. As part of our ongoing modernization plans, we announced, complete with a renewable solar power strategy, an estimated $255 million^1^ brownfield redevelopment of our lumber manufacturing site in Henderson, Texas. With start-up planned for 2024, the replacement mill is positioned to be a low-cost leader that reflects our efforts to sustainably and profitably grow our business.

1.	Non-GAAP Financial Measure<br>

A NORTH AMERICAN AND EUROPEAN ENGINEERED WOOD LEADER

Our North American and European Engineered Wood segments each made significant positive EBITDA^1^ contributions over the year. The outlook remains strong as residential improvement and industrial have become more significant drivers of U.S. OSB consumption, combining for more than one-third of total 2022 industry demand. As part of the Company’s capital plan, approximately $75 million is being invested to upgrade and optimize the Allendale facility. The idled OSB mill was acquired in late 2021 and is scheduled to start up by mid-2023. With the help of our skilled OSB team, we expect the mill will be among the lowest cost mills in our OSB portfolio when operating at full capacity.

A LOOK AHEAD

In a global effort to reduce the impacts of climate change, the outlook for renewable and sustainable wood building materials continues to grow. We believe our sustainable and renewable building products coupled with our geographic diversity have positioned West Fraser well to be a key long-term supplier to our customers.

I am proud of what West Fraser achieved in 2022 and look forward to the opportunities we have in front of us. On behalf of our executive team, I would like to thank our dedicated and committed employee team for their contributions to both our past and future success and thank our Board of Directors for their vision and guidance in support of our proud West Fraser story.

Ray Ferris

President and Chief Executive Officer

LOGO

4 WEST FRASER 2022 Highlights FINANCE AND OPERATIONS

LOGO

Established a 8% 15% 25% West Fraser Health of Canadian of our workforce is of employees self-identify with and Wellness employees comprised of women, an under-represented racial or Committee self-identify as a 2% increase from ethnic identity, a 1% increase Indigenous last year from last year Named as one of Canada’s Top 100 Employers Advanced our commitment to PAR Certification by for the 10th consecutive year defining a Leadership Commitment Statement COMMUNITY $4.3 million community organizations received ~500 community investments invested in community organizations

6 WEST FRASER

Financial Performance

FIVE-YEAR FINANCIAL REVIEW

(in millions ofU.S. dollars, except where indicated)

	2022
Earnings
Sales		9,701	10,518	4,373	3,673	4,722
Cost of product sold		(5,142)	(4,645)	(2,559)	(2,750)	(2,789)
Freight and other distribution costs		(963)	(846)	(529)	(538)	(565)
Export duties, net^1^		(18)	(146)	(57)	(122)	(156)
Amortization		(589)	(584)	(203)	(195)	(199)
Selling, general and administration		(365)	(312)	(185)	(159)	(178)
Equity-based compensation		(5)	(40)	(9)	(4)	(5)
Restructuring and impairment charges		(60)	–	–	(25)	–
Operating earnings		2,559	3,945	831	(120)	830
Finance expense, net		(3)	(45)	(27)	(37)	(29)
Other		37	(2)	(14)	(8)	29
Tax (provision) recovery		(618)	(951)	(202)	52	(203)
Earnings		1,975	2,947	588	(113)	627
AdjustedEBITDA^2^		3,212	4,569	1,043	104	1,034
Cash flows from operating activities		2,207	3,552	968	87	702
Capital expenditures		477	635	180	309	286
Financial position
Current assets		2,749	3,217	1,336	883	986
PPE & timber licenses		4,333	4,468	2,029	2,028	1,883
Goodwill & other intangibles		2,358	2,440	591	594	562
Export duty deposits^3^		354	242	178	61	55
Other assets		175	58	35	20	23
Deferred income tax assets		4	8	9	8	2
Total assets		9,973	10,433	4,178	3,594	3,511
Current liabilities		792	1,206	528	644	435
Long-term debt (including current portion)		499	499	500	500	508
Other liabilities		268	360	408	350	231
Deferred income tax liabilities		795	712	264	195	214
Shareholders’ equity		7,619	7,656	2,478	1,905	2,123
Total liabilities & equity		9,973	10,433	4,178	3,594	3,511
EPS	Adjusted EBITDA^2^	Cash flows from operating activities
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per common share (dollars)	in millions of U.S. dollars	in millions of U.S. dollars

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2022 ANNUALREPORT 7

	2022		2021
Per common share (dollars)
Basic EPS		21.06		27.03	8.56	(1.64)	8.42
TSX Price range (CAD):
High		132.91		124.74	86.50	80.13	97.99
Low		89.95		73.30	21.60	43.93	60.44
Close		97.77		120.68	81.78	57.28	67.44
NYSE Price range:^4^
High		102.96		97.59	n/a	n/a	n/a
Low		68.75		61.36	n/a	n/a	n/a
Close		72.29		95.36	n/a	n/a	n/a
Dividends declared per share		1.15		0.76	0.56	0.60	0.54
Shares outstanding at<br>year-end (‘000s)		83,555		105,929	68,679	68,663	69,819
Ratios
Return on capital employed^5^		28%		61%	25%	-4%	27%
Net debt to capitalization^6^		-9%		-16%	2%	29%	19%
Number of employees atyear-end		11,056		10,928	8,115	8,200	8,570
Shipments
SPF Lumber (MMfbm)		2,705		3,176	3,214	3,363	3,790
SYP Lumber (MMfbm)		3,036		2,649	2,861	2,692	2,792
NA OSB (MMsf 3/8” basis)		6,006		5,674	–	–	–
EU OSB (MMsf 3/8” basis)		977		1,010	–	–	–
Pulp (Mtonnes)		968		1,033	1,132	1,173	1,138
1.	Export duties for 2022 are net of an $81 million recovery related to the USDOC finalization of the duty rates for the<br>AR3 POI dated January 1, 2020 to December 31, 2020. Export duties for 2021 are net of a $55 million recovery related to the USDOC finalization of the duty rates for the AR2 POI dated January 1, 2019 to December 31, 2019.<br>Export duties for 2020 are net of a $95 million recovery related to the USDOC finalization of the duty rates for the AR1 POI dated April 28, 2017 to December 31, 2018.
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2.	Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of our 2022 Management’s Discussion & Analysis for more information on this measure. Effective January 1, 2022, and for all<br>comparative periods, export duties are no longer excluded from the definition of Adjusted EBITDA.
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3.	Export duty deposits for 2022 include export duty receivable of $81 million related to the USDOC finalization of the<br>duty rates for the AR3 POI dated January 1, 2020 to December 31, 2020. Export duty deposits for 2021 include export duty receivable of $55 million related to the USDOC finalization of the duty rates for the AR2 POI dated<br>January 1, 2019 to December 31, 2019. Export duty deposits for 2020 include export duty receivable of $95 million related to the USDOC finalization of the duty rates for AR1 POI dated April 28, 2017 to December 31, 2018.<br>
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4.	Our common shares began trading on the NYSE under the symbol WFG on February 1, 2021.
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5.	Return on capital employed is calculated as GAAP EBIT divided by total assets minus current liabilities.<br>
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6.	Net debt to capitalization is a non-GAAP financial measure calculated as net debt<br>divided by total capital, expressed as a percentage. Net debt is calculated as total debt less cash and cash equivalents. Total capital is defined as the sum of net debt plus total equity. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of our 2021 Annual MD&A for more information on this measure.
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SPF Lumber shipments	SYP Lumber shipments	NA OSB shipments	EU OSB shipments
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in MMfbm	in MMfbm	in MMsf 3/8” basis	in MMsf 3/8” basis

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MANAGEMENT’S DISCUSSION & ANALYSIS

INTRODUCTION

This discussion and analysis by management (“MD&A”) of West Fraser Timber Co. Ltd.’s (“West Fraser”, the “Company”, “we”, “us”, or “our”) financial performance for the year and three months ended December 31, 2022 should be read in conjunction with our annual audited consolidated financial statements and accompanying notes for the year ended December 31, 2022 (the “Annual Financial Statements”).

Unless otherwise indicated, the financial information contained in this MD&A is derived from our Annual Financial Statements, which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). This MD&A uses various Non-GAAP and other specified financial measures, including “Adjusted EBITDA”, “Adjusted EBITDA by segment”, “available liquidity”, “total debt to capital ratio”, “net debt to capital ratio”, and “expected capital expenditures”. An explanation with respect to the use of these Non-GAAP and other specified financial measures is set out in the section titled “Non-GAAP and Other Specified Financial Measures”.

This MD&A includes statements and information that constitute “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Please refer to the cautionary note entitled “Forward-Looking Statements” below for a discussion of these forward-looking statements and the risks that impact these forward-looking statements.

Dollar amounts are expressed in the United States (“U.S.”) currency unless otherwise indicated and reflect the change in our functional and reporting currency from the Canadian dollar to the U.S. dollar effective February 1, 2021. This MD&A uses capitalized terms, abbreviations and acronyms that are defined under “Glossary of Key Terms”. The information in this MD&A is as at February 14, 2023 unless otherwise indicated.

OUR BUSINESS AND STRATEGY

West Fraser is a diversified wood products company with facilities in Canada, the U.S., the U.K. and Europe, manufacturing, selling, marketing and distributing lumber, engineered wood products (OSB, LVL, MDF, plywood, particleboard), pulp, newsprint, wood chips and other residuals and renewable energy. Our business is comprised of 34 lumber mills, 15 OSB facilities, 6 renewable energy facilities, 5 pulp and paper mills, 3 plywood facilities, 3 MDF facilities, 2 particleboard facilities, 1 LVL facility, 1 treated wood facility, and 1 veneer facility.

Our goal at West Fraser is to generate strong financial results through the business cycle, relying on our committed workforce, the quality of our assets and our well-established people and culture. This culture emphasizes cost control in all aspects of the business and operating in a responsible, sustainable, financially conservative and prudent manner.

The North American wood products industry is cyclical and periodically faces difficult market conditions. Our earnings are sensitive to changes in world economic conditions, primarily those in North America, Asia and Europe and particularly to the U.S. housing market for new construction and repair and renovation spending. Most of our revenues are from sales of commodities for which prices are sensitive to variations in supply and demand. As many of our costs are denominated in Canadian dollars, British pounds sterling and Euros, exchange rate fluctuations of the Canadian dollar, British pound sterling and Euro against the United States dollar can and are anticipated to be a significant source of earnings volatility for us.

West Fraser strives to make sustainability a central principle upon which our people operate, and we believe the Company’s renewable building materials that sequester carbon are a truly natural solution in the fight against climate change. There are numerous government initiatives and proposals globally to address climate-related issues. Within the jurisdictions of West Fraser’s operations, some of these initiatives would regulate, and do regulate and/or tax the

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production of carbon dioxide and other greenhouse gases to facilitate the reduction of carbon emissions, providing incentives to produce and use cleaner energy. In the first quarter of 2022, we joined the Science Based Targets Initiative (“SBTi”) demonstrating the Company’s commitment to sustainability leadership and contribution to global climate action, including setting specific science-based targets to achieve near-term greenhouse gas reductions across all of our operations located in Canada, the U.S., the U.K. and Europe.

We believe that maintaining a strong balance sheet and liquidity profile, along with our investment-grade debt rating, enables us to execute a balanced capital allocation strategy. Our goal is to reinvest in our operations across all market cycles to strategically enhance productivity, product mix, and capacity and to maintain a leading cost position. We believe that a strong balance sheet also provides the financial flexibility to capitalize on growth opportunities, including the pursuit of opportunistic acquisitions and larger-scale strategic growth initiatives, and is a key tool in managing our business over the long term including returning capital to shareholders.

RECENT DEVELOPMENTS

Markets

In North America, changes in new home construction activity in the U.S. are a significant driver of lumber and OSB demand. According to the U.S. Census Bureau, the seasonally adjusted annualized rate of U.S. housing starts averaged 1.38 million units in December 2022, with permits issued averaging 1.33 million units. U.S. housing starts were 1.55 million units for the full year, down 3% from 1.60 million units in 2021. While there are near-term headwinds to new home construction, owing in large part to the recent upward reset in interest rates and the impact on housing affordability, low supply of existing homes for sale, the backlog of new homes under construction caused by lagging completions and changes in home ownership trends stemming from the COVID-19 pandemic provide offsetting factors that are expected to support longer-term core demand for home construction activity. However, should interest rates continue to rise or housing prices remain elevated, housing affordability may be impacted, which could reduce near-term demand for new home construction and thus near-term demand for our wood building products.

Relative to new home construction markets, demand for our products used in repair and remodelling applications remained robust in the fourth quarter. While there is risk of relatively high inflation tempering consumer spending and growth in near-term repair and remodelling demand, over the medium term an aging housing stock and the apparent entrenchment of greater work-from-home flexibility are expected to continue to drive renovation and repair spending that supports lumber, plywood and OSB demand.

Indefinite Curtailment of Perry Sawmill

On January 10, 2023, we announced the indefinite curtailment of our Perry sawmill in Florida as a result of high fibre costs and softening lumber markets. The indefinite curtailment will decrease our annual U.S. lumber production by 100 million board feet. In Q4-22 we recorded restructuring and impairment charges of $31 million relating to the indefinite curtailment.

Curtailment of Cariboo Pulp & Paper

On February 7, 2023, we announced the planned curtailment of operations at Cariboo Pulp & Paper located in Quesnel, British Columbia, beginning in mid-April for a month and then for another month in the third quarter, due to a decline in the availability of sawmill residuals. Downtime at Cariboo Pulp & Paper will help better align our production capacity this year with the available fibre supply. These plans may be adjusted should fibre forecasts change.

CVD and ADD Duty Rates

On January 24, 2023, the USDOC released the preliminary results from AR4 POI covering the 2021 calendar year, which indicated a rate of 2.48% for CVD and 6.90% for ADD for West Fraser. The duty rates are subject to an appeal process, and we will record an adjustment once the rates are finalized. If the AR4 rates were to be confirmed, it would result in a recovery of $62 million before the impact of interest for the POI covered by AR4. This adjustment would be in addition to the amounts already recorded on our balance sheet. If these rates were finalized, our combined cash deposit rate would be 9.38%.

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ANNUAL RESULTS

Summary Annual Results<br> ( millions, except as otherwise indicated)		2021		2020
Earnings
Sales	9,701	$	10,518	$	4,373
Cost of products sold	(5,142)		(4,645)		(2,559)
Freight and other distribution costs	(963)		(846)		(529)
Export duties, net	(18)		(146)		(57)
Amortization	(589)		(584)		(203)
Selling, general and administration	(365)		(312)		(185)
Equity-based compensation	(5)		(40)		(9)
Restructuring and impairment charges	(60)		—		—
Operating earnings	2,559		3,945		831
Finance expense, net	(3)		(45)		(27)
Other	37		(2)		(14)
Tax provision	(618)		(951)		(202)
Earnings	1,975	$	2,947	$	588
Adjusted EBITDA1	3,212	$	4,569	$	1,043
Basic earnings per share ()	21.06		27.03		8.56
Diluted earnings per share ()	20.86		27.03		8.56
Cash dividends declared per share2 ()	1.15		0.76		0.59
Total assets	9,973		10,433		4,178
Long-term debt, non-current	499		499		500
Long-term debt, total	499		499		507

All values are in US Dollars.

This is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Cash dividends of CAD$0.80 per share were declared during the year ended December 31, 2020. Cash dividends declared during the year ended December 31, 2021 were comprised of CAD$0.70 per share in aggregate for the first three quarters and USD$0.20 per share for the fourth quarter. The CAD amounts have been translated to USD for presentation purposes using the average exchange rate during the quarter that the dividends were declared.

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In 2022, our revenues were $9,701 million and we generated earnings of $1,975 million, or $20.86 of diluted earnings per share. This compares with revenues of $10,518 million and earnings of $2,947 million, or $27.03 of diluted earnings per share, in 2021, and revenues of $4,373 million and earnings of $588 million, or $8.56 of diluted earnings per share, in 2020. Our 2022 results were impacted primarily by decreases in lumber and OSB pricing, cost inflation across a number of our inputs, and restructuring and impairment charges compared to 2021. The acquisition of Norbord and increased pricing and demand for our products driven by increased home construction and repair and remodelling activity in North America increased our revenues and earnings in 2021 compared to 2020.

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Discussion & Analysis of Annual Results by Product Segment

Lumber Segment

Lumber Segment Earnings<br><br><br>****($ millions unless otherwise indicated)	2022			2021
Sales
Lumber	$	4,077		$	4,520
Wood chips and other residuals		309			289
Logs and other		79			101
		4,465			4,910
Cost of products sold		(2,489	)		(2,241	)
Freight and other distribution costs		(435	)		(404	)
Export duties, net		(18	)		(146	)
Amortization		(186	)		(164	)
Selling, general and administration		(194	)		(146	)
Restructuring and impairment charges		(31	)		—
Operating earnings		1,111			1,809
Finance income (expense), net		1			(17	)
Other income		5			2
Earnings before tax	$	1,117		$	1,794
Adjusted EBITDA^1^	$	1,328		$	1,973
Capital expenditures	$	184		$	146
SPF (MMfbm)
Production		2,635			3,182
Shipments		2,705			3,176
SYP (MMfbm)
Production		3,018			2,675
Shipments		3,036			2,649
1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure. 2021 Adjusted EBITDA was decreased by a<br>one-time charge of $2 million related to inventory purchase price accounting on the Angelina Acquisition.
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Sales and Shipments

Lumber sales were lower compared to 2021 due to lower product pricing and, to a lesser extent, lower shipments.

Lumber pricing decreased in the second half of 2022 as demand weakened. The price variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $352 million compared to 2021.

SPF shipment volumes decreased compared to 2021 due primarily to transportation constraints in early 2022 and weakened demand in the second half of 2022. The first quarter of 2022 was impacted by disruptions to rail and truck services resulting from severe weather and flooding in B.C. in the fourth quarter of 2021.

SYP shipment volumes increased compared to 2021 due primarily to the acquisition of the Angelina lumber mill in the fourth quarter of 2021 and ramp-up of production at our lumber mill in Dudley, Georgia. Shipment volumes in 2021 were also negatively impacted by a period of extreme weather conditions in the U.S. South.

The volume variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $33 million compared to 2021.

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	2022		2021
SPF Sales by Destination	MMfbm	%	MMfbm	%
U.S.	1,755	65%	2,098	66%
Canada	837	31%	753	24%
China	35	1%	189	6%
Other	78	3%	136	4%
	2,705		3,176

We ship SPF to several export markets, while our SYP sales are almost entirely within the U.S. The relative proportion of SPF shipments to China decreased compared to 2021 due primarily to reduced demand from the construction industry as pandemic-related lockdowns in the country slowed economic activity and the strengthening of the USD against the Chinese renminbi reduced purchasing power for Chinese buyers. Additional restrictions implemented on Chinese ports and ongoing container shortages have also been contributing factors to the decrease in SPF shipments to China year over year.

Wood chip and other residual sales increased compared to 2021 due primarily to the acquisition of the Angelina lumber mill and higher pricing, offset in part by decreases in chip production at our Western Canada locations. Chip production decreased in line with lumber production year over year. Logs and other sales decreased compared to 2021 due to the impacts of constrained fibre availability.

Costs and Production

SPF production volumes were lower compared to 2021 due primarily to reductions in operating schedules at our Western Canada locations to manage inventory levels and align operating capacity with constrained transportation and timber availability. The impact of the previously announced permanent curtailment of one shift at our Fraser Lake and Williams Lake sawmills was also a contributing factor.

SYP production volumes increased compared to 2021 due primarily to the acquisition of the Angelina lumber mill and ramp-up of production at our lumber mill in Dudley, Georgia, which began producing during Q2-21. 2021 production volumes at certain of our locations were also negatively impacted by extreme winter conditions in the U.S. South.

We have experienced significant cost inflation across a number of our inputs including supplies and materials, energy, employee costs, and transportation.

Costs of products sold were higher compared to 2021 due primarily to higher log costs and higher manufacturing costs in both our Canadian and U.S. operations, offset in part by lower shipment volumes. Adjustments to write-down inventory to its net realizable value were $51 million higher in 2022, which contributed to the unfavourable variance year over year.

Most of our SPF log requirements are harvested from crown lands owned by the provinces of B.C. or Alberta. B.C.’s stumpage system is tied to reported lumber prices, with a time lag, and publicly auctioned timber harvesting rights. Alberta’s stumpage system is correlated to published lumber prices with a shorter time lag.

SPF log costs in 2022 were higher compared to 2021 due to higher purchased log costs and increases in logging and fuel costs in both B.C. and Alberta. Stumpage decreased year over year, driven primarily by a decrease in stumpage rates in B.C.

SPF unit manufacturing costs increased versus 2021 due primarily to lower production and higher energy and supplies and materials costs.

SYP log costs were higher compared to 2021 due to increased competition for logs. SYP unit manufacturing costs increased compared to 2021 due to higher supplies and materials, energy, and employee costs, offset in part by increased production.

Freight and other distribution costs increased compared to 2021 due to higher fuel costs and higher rates for trucking and rail services, offset in part by lower shipment volumes.

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Export duty expense decreased compared to 2021. Export duties in 2022 included a recovery of $81 million related to the USDOC finalization of AR3 duty rates whereas export duties in 2021 included a recovery of $55 million related to the USDOC finalization of AR2 duty rates. As disclosed in the table below, the effective duty expense for 2022 decreased compared to 2021 due primarily to a lower CVD cash deposit rate and estimated ADD rate, lower volumes of softwood lumber shipped to the U.S., and lower pricing.

The following table reconciles our cash deposits paid during the year to the amount recorded in our statements of earnings:

Duty impact on earnings ($ millions)	2022
Cash deposits paid^1^		(117	)	(132	)
Adjust to West Fraser Estimated ADD rate^2^		18		(69	)
Effective duty expense for period^3^		(99	)	(201	)
Duty recovery attributable to AR2^4^		—		55
Duty recovery attributable to AR3^5^		81		—
Export duty expense		(18	)	(146	)
Net interest income on duty deposits receivable		9		9
1.	Represents combined CVD and ADD cash deposit rate of 8.97% for January 1, 2021 to December 1, 2021, 11.12% from<br>December 2, 2021 to January 9, 2022, 11.14% from January 10, 2022 to August 8, 2022, and 8.25% from August 9, 2022 to December 31, 2022.
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2.	Represents adjustment to West Fraser Estimated ADD rate of 4.52% for 2022 and 6.80% for 2021.
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3.	The total represents the combined CVD cash deposit rate and West Fraser Estimated ADD rate of 14.37% for January 1,<br>2021 to December 1, 2021, 11.86% for December 2, 2021 to December 31, 2021, 9.58% for January 1, 2022 to January 9, 2022, 9.60% from January 10, 2022 to August 8, 2022, and 8.14% from August 9, 2022 to<br>December 31, 2022.
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4.	$55 million represents the duty recovery attributable to the finalization of AR2 duty rates for the 2019 POI.<br>
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5.	$81 million represents the duty recovery attributable to the finalization of AR3 duty rates for the 2020 POI.<br>
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Amortization expense was higher compared to 2021 due primarily to incremental amortization relating to the acquired Angelina lumber mill.

Selling, general and administration costs were higher compared to 2021 due primarily to higher salaries and benefits, increased travel following easing of COVID restrictions, and increased levels of community investment. Updates in the allocation methodology for corporate overhead costs was also a contributing factor to the increase year over year.

In 2022 we recorded restructuring and impairment charges of $31 million relating to the indefinite curtailment of operations at our Perry sawmill.

Finance income, net in 2022 includes $9 million of interest income on export duties related primarily to the finalization of our AR3 duty rates. Finance expense, net in 2021 similarly includes $9 million of interest income related to the finalization of our AR2 duty rates. Finance expense excluding this amount decreased compared to 2021 due to a lower allocation of consolidated finance expense.

Other income relates primarily to foreign exchange revaluations on the Canadian dollar monetary assets and liabilities held by our Canadian operations.

Earnings before tax for the Lumber Segment decreased by $677 million compared to 2021 for the reasons explained above.

Adjusted EBITDA for the Lumber Segment decreased by $645 million compared to 2021. The following table shows the Adjusted EBITDA variance for the period.

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Adjusted EBITDA ($ millions)	2021 to 2022
Adjusted EBITDA - comparative period	$	1,973
Price		(352	)
Volume		(33	)
Changes in export duties		127
Changes in costs		(307	)
Impact of inventory write-downs		(51	)
Other		(29	)
Adjusted EBITDA - current period	$	1,328

Softwood Lumber Dispute

On November 25, 2016, a coalition of U.S. lumber producers petitioned the USDOC and the USITC to investigate alleged subsidies to Canadian softwood lumber producers and levy CVD and ADD duties against Canadian softwood lumber imports. The USDOC has and continues to choose us as a “mandatory respondent” to both the countervailing and antidumping investigations, and as a result, we have received unique company-specific rates.

Developments in CVD and ADD rates

We began paying CVD and ADD duties in 2017 based on the determination of duties payable by the USDOC. The CVD and ADD cash deposit rates are updated based on the USDOC’s AR for each POI, as summarized in the tables below. On March 9, 2022, the USDOC initiated AR4 POI covering the 2021 calendar year. West Fraser was selected as a mandatory respondent, which will result in West Fraser continuing to be subject to a company-specific rate.

The respective Cash Deposit Rates, the AR POI Final Rate, and the West Fraser Estimated ADD Rate for each period are as follows:

Effective dates for CVD	Cash Deposit<br><br><br>Rate		AR POI Final<br><br><br>Rate
AR1 POI^1,2^
April 28, 2017 - August 24, 2017		24.12%	6.76%
August 25, 2017 - December 27, 2017		—%	—%
December 28, 2017 - December 31, 2017^3^		17.99%	6.76%
January 1, 2018 - December 31, 2018		17.99%	7.57%
AR2 POI^4^
January 1, 2019 - December 31, 2019		17.99%	5.08%
AR3 POI^5^
January 1, 2020 - November 30, 2020		17.99%	3.62%
December 1, 2020 - December 31, 2020^6^		7.57%	3.62%
AR4 POI^7^
January 1, 2021 - December 1, 2021		7.57%	n/a
December 2, 2021 - December 31, 2021^8^		5.06%	n/a
AR5 POI^9^
January 1, 2022 – January 9, 2022		5.06%	n/a
January 10, 2022 – August 8,<br>2022^10^		5.08%	n/a
August 9, 2022 - December 31, 2022^11^		3.62%	n/a
1.	On April 24, 2017, the USDOC issued its preliminary rate in the CVD investigation. The requirement that we make cash<br>deposits for CVD was suspended on August 24, 2017, until the USDOC published the revised rate.
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2.	On November 24, 2020, the USDOC issued the final CVD rate for the AR1 POI.
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3.	On December 4, 2017, the USDOC revised our CVD Cash Deposit Rate effective December 28, 2017.<br>
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4.	On November 24, 2021, the USDOC issued the final CVD rate for the AR2 POI. On January 10, 2022, the USDOC<br>amended the final CVD rate for the AR2 POI from 5.06% to 5.08% for ministerial errors. This table only reflects the final rate.
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5.	On August 4, 2022, the USDOC issued the final CVD rate for the AR3 POI.
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6.	On November 24, 2020, the USDOC revised our CVD Cash Deposit Rate effective December 1, 2020.<br>
7.	The CVD rate for the AR4 POI will be adjusted when AR4 is complete and the USDOC finalizes the rate, which is not expected<br>until 2023.
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8.	On November 24, 2021, the USDOC revised our CVD Cash Deposit Rate effective December 2, 2021.<br>
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9.	The CVD rate for the AR5 POI will be adjusted when AR5 is complete and the USDOC finalizes the rate, which is not expected<br>until 2024.
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10.	On January 6, 2022, the USDOC revised our CVD Cash Deposit Rate effective January 10, 2022.<br>
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11.	On August 4, 2022, the USDOC revised our CVD Cash Deposit Rate effective August 9, 2022.
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Effective dates for ADD	Cash Deposit Rate		AR POI Final Rate		West Fraser Estimated<br><br><br>Rate
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AR1 POI^1,2^
June 30, 2017 - December 3, 2017		6.76%		1.40%	1.46%
December 4, 2017 - December 31, 2017^3^		5.57%		1.40%	1.46%
January 1, 2018 - December 31, 2018		5.57%		1.40%	1.46%
AR2 POI^4^
January 1, 2019 - December 31, 2019		5.57%		6.06%	4.65%
AR3 POI^5^
January 1, 2020 - November 29, 2020		5.57%		4.63%	3.40%
November 30, 2020 - December 31, 2020^6^		1.40%		4.63%	3.40%
AR4 POI^7^
January 1, 2021 - December 1, 2021		1.40%		n/a	6.80%
December 2, 2021 - December 31, 2021^8^		6.06%		n/a	6.80%
AR5 POI^9^
January 1, 2022 - August 8, 2022		6.06%		n/a	4.52%
August 9, 2022 - December 31, 2022^10^		4.63%		n/a	4.52%
1.	On June 26, 2017, the USDOC issued its preliminary rate in the ADD investigation effective June 30, 2017.<br>
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2.	On November 24, 2020, the USDOC issued the final ADD rate for the AR1 POI.
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3.	On December 4, 2017, the USDOC revised our ADD Cash Deposit Rate effective December 4, 2017.<br>
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4.	On November 24, 2021, the USDOC issued the final ADD rate for the AR2 POI.
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5.	On August 4, 2022, the USDOC issued the final ADD rate for the AR3 POI.
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6.	On November 24, 2020, the USDOC revised our ADD Cash Deposit Rate effective November 30, 2020.<br>
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7.	The ADD rate for the AR4 POI will be adjusted when AR4 is complete and the USDOC finalizes the rate, which is not expected<br>until 2023.
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8.	On November 24, 2021, the USDOC revised our ADD Cash Deposit Rate effective December 2, 2021.<br>
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9.	The ADD rate for the AR5 POI will be adjusted when AR5 is complete and the USDOC finalizes the rate, which is not expected<br>until 2024.
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10.	On August 4, 2022, the USDOC revised our ADD Cash Deposit Rate effective August 9, 2022.
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Accounting policy for duties

The CVD and ADD rates apply retroactively for each POI. We record CVD as export duty expense at the cash deposit rate until an AR finalizes a new applicable rate for each POI. We record ADD as export duty expense by estimating the rate to be applied for each POI by using our actual results and a similar calculation methodology as the USDOC and adjust when an AR finalizes a new applicable rate for each POI. The difference between the cumulative cash deposits paid and cumulative export duty expense recognized for each POI is recorded on our balance sheet as export duty deposits receivable or payable.

The difference between the cash deposit amount and the amount that would have been due based on the final AR rate will incur interest based on the U.S. federally published interest rate. We record interest income on our duty deposits receivable, net of any interest expense on our duty deposits payable, based on this rate.

Appeals

On May 22, 2020, the North American Free Trade Agreement (“NAFTA”) panel issued its final decision on “Injury”. The NAFTA panel rejected the Canadian parties’ arguments and upheld the USITC’s remand determination in its entirety.

On August 28, 2020, the World Trade Organization’s (“WTO”) dispute-resolution panel ruled unanimously that U.S. countervailing duties against Canadian softwood lumber are inconsistent with the WTO obligations of the United States. The decision confirmed that Canada does not subsidize its softwood lumber industry. On September 28, 2020, the U.S. announced that it would appeal the WTO panel’s decision.

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The softwood lumber case will continue to be subject to NAFTA or the new Canada-United States-Mexico Agreement (“CUSMA”), WTO dispute resolution processes, and litigation in the U.S. In the past, long periods of litigation have led to negotiated settlements and duty deposit refunds. In the interim, duties remain subject to the USDOC AR process, which results in an annual adjustment of duty deposit rates.

Notwithstanding the deposit rates assigned under the investigations, our final liability for CVD and ADD will not be determined until each annual administrative review process is complete and related appeal processes are concluded.

Softwood Lumber - Sunset Review

The USDOC issued antidumping and countervailing duty orders on certain softwood products from Canada on January 3, 2018. U.S. trade law requires that the USDOC and USITC conduct a so-called “sunset review” five years after the publication of an antidumping and countervailing duty order. Accordingly, in late 2022 the USDOC and USITC indicated they will conduct separate, but related, sunset reviews of the duty orders in 2023.

The purpose of the USDOC review is to contemplate the effect of a revocation of duties and assess the duty margins that would prevail. The purpose of the USITC review is to determine whether revocation of a duty order would lead to a “continuation or recurrence of material injury” of the U.S. industry. Neither process is expected to change the duty regime currently in place and is subject to annual Administrative Reviews.

North America Engineered Wood Products Segment

NA EWP Segment Earnings<br><br><br>****($ millions unless otherwise indicated)	2022			2021
Sales
OSB	$	3,004		$	3,450
Plywood, LVL and MDF		759			796
Wood chips, logs and other		26			27
		3,789			4,273
Cost of products sold		(1,677	)		(1,521	)
Freight and other distribution costs		(329	)		(262	)
Amortization		(306	)		(289	)
Selling, general and administration		(106	)		(76	)
Operating earnings		1,371			2,125
Finance expense, net		(4	)		(3	)
Other income (expense)		16			(1	)
Earnings before tax	$	1,383		$	2,121
Adjusted EBITDA^1^	$	1,677		$	2,414
Capital expenditures^2^	$	235		$	424
OSB (MMsf 3/8” basis)
Production		6,109			5,654
Shipments		6,006			5,674
Plywood (MMsf 3/8” basis)
Production		716			763
Shipments		707			756
1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure. 2021 Adjusted EBITDA was decreased by a<br>one-time charge of $86 million related to inventory purchase price accounting.
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2.	2021 capital expenditures include $276 million relating to the acquisition of the idled OSB mill near Allendale,<br>South Carolina.
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Our NA EWP segment includes our North American OSB, plywood, MDF, and LVL operations. Our financial results up to February 1, 2021 only reflect activities associated with our plywood, MDF, and LVL operations. Subsequent to February 1,

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2021, our operations and financial results reflect the consolidated activities and operations of West Fraser and Norbord, including incorporating the North American operations and financial results of Norbord into our NA EWP segment.

Sales and Shipments

Sales decreased compared to 2021 due primarily to lower OSB and plywood pricing, offset by increased OSB shipments and higher MDF and LVL pricing.

The price variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $671 million compared to 2021.

OSB shipment volumes increased compared to 2021 due primarily to the inclusion of an additional month of OSB shipments and ramp-up of our Chambord OSB mill. The impacts of constrained railcar availability in the first quarter of the year and weakening demand in the fourth quarter of the year partially offset the aforementioned increases.

Plywood shipment volumes decreased compared to 2021 due primarily to weakening demand and reductions in production volumes, discussed further in the section below.

The volume variance resulted in an increase in earnings before tax and Adjusted EBITDA of $115 million compared to 2021.

Costs and Production

OSB production volumes increased versus 2021 due primarily to the inclusion of an additional month of production in 2022 and incremental production from the ramp-up of our Chambord mill, offset by the impacts of production curtailments taken to manage inventory levels and align operating capacity with constrained transportation availability.

Plywood production volumes decreased compared to 2021 due to the impact of the previously announced permanent curtailment of one shift at our Quesnel Plywood mill and incremental production curtailments taken in 2022 to manage inventory levels and align operating capacity with constrained transportation and fibre availability.

Our costs of products sold increased compared to 2021 due primarily to higher resin, energy and fibre costs and the inclusion of an additional month of OSB shipments. These factors were offset in part by the impact of a one-time charge of $86 million related to inventory purchase price accounting in 2021 and lower plywood shipment volumes.

Freight and other distribution costs increased compared to 2021 in part due to the substitution of trucking services for rail services and the inclusion of an additional month of OSB shipments in 2022. Higher fuel costs and overall inflationary pressures were also contributing factors.

Amortization expense increased compared to 2021 due to the inclusion of an additional month of OSB results and amortization in relation to the idled OSB mill near Allendale, South Carolina, offset in part by decreases as certain assets reached the end of their estimated useful lives.

Selling, general and administration costs were higher than 2021 due primarily to higher salaries and wages, increased travel following easing of COVID restrictions, and updates in the allocation methodology for corporate overhead costs. The inclusion of an additional month of OSB results was also a contributing factor to the increase compared to 2021.

Finance expense was comparable to 2021. Fluctuations in Other relates primarily to intercompany transactions that eliminate upon consolidation through an offsetting balance in the Corporate & Other segment.

Earnings before tax for the NA EWP Segment decreased $738 million compared to 2021 due to the reasons explained above.

Adjusted EBITDA for the NA EWP Segment decreased by $737 million from 2021. The following table shows the Adjusted EBITDA variance for the period. Our Adjusted EBITDA analysis includes OSB, plywood, LVL and MDF, as the OSB results were included in both years.

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Adjusted EBITDA ($ millions)	2021 to 2022
Adjusted EBITDA - comparative period	$	2,414
Price		(671	)
Volume		115
Changes in costs		(185	)
Other		4
Adjusted EBITDA - current period	$	1,677

Pulp & PaperSegment

Pulp & Paper Segment Earnings<br><br><br>****($ millions unless otherwise indicated)	2022			2021
Sales	$	807		$	727
Cost of products sold		(596	)		(541	)
Freight and other distribution costs		(153	)		(137	)
Amortization		(35	)		(34	)
Selling, general and administration		(32	)		(34	)
Restructuring and impairment charges		(13	)		—
Operating loss		(22	)		(19	)
Finance expense		(2	)		(5	)
Other income (expense)		1			2
Loss before tax	$	(23	)	$	(22	)
Adjusted EBITDA^1^	$	26		$	15
Capital expenditures	$	29		$	35
Pulp (Mtonnes)
Production		940			1,051
Shipments		968			1,033
1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.
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Sales and Shipments

Sales increased compared to 2021 due primarily to increases in pulp pricing, offset in part by lower shipment volumes. The price variance resulted in an increase in earnings before tax and Adjusted EBITDA of $123 million compared to 2021.

Pulp shipments decreased compared to 2021 due to reductions in production volumes, discussed further in the section below. The volume variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $8 million compared to 2021.

Costs and Production

Pulp production decreased compared to 2021 due primarily to reductions in operating schedules in the first half of the year to manage inventory levels as a result of transportation disruptions, the transition of the Hinton pulp mill to single-line production of UKP, and lower overall uptime.

Costs of products sold increased compared to 2021 due primarily to higher fibre, energy, maintenance, and chemical costs. Lower shipment volumes provided an offsetting factor.

Freight and other distribution costs increased compared to 2021 due to the substitution of trucking services for rail services as well as higher fuel and ocean freight costs. Lower shipment volumes compared to 2021 provided an offsetting effect.

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Amortization, selling, general, and administration costs, finance expense, and other were similar to 2021.

A $13 million impairment charge was recorded in 2022 relating to equipment that was permanently decommissioned as part of the transition of the Hinton pulp mill to single-line production of UKP.

Loss before tax for the Pulp & Paper Segment increased by $1 million compared to 2021 due to the reasons explained above.

Adjusted EBITDA for the Pulp & Paper Segment increased by $11 million compared to 2021. The following table shows the Adjusted EBITDA variance for the period.

Adjusted EBITDA ($ millions)	2021 to 2022
Adjusted EBITDA - comparative period	$	15
Price		123
Volume		(8	)
Changes in costs		(90	)
Other		(14	)
Adjusted EBITDA - current period	$	26

EuropeEngineered Wood Products Segment

Europe EWP Segment Earnings<br> ( millions unless otherwise indicated)			2021
Sales	738		$	723
Cost of products sold	(479	)		(457	)
Freight and other distribution costs	(46	)		(43	)
Amortization	(53	)		(88	)
Selling, general and administration	(28	)		(22	)
Restructuring and impairment charges	(15	)		—
Operating earnings	117			113
Finance expense	—			(1	)
Other income (expense)	—			—
Earnings before tax	118		$	112
Adjusted EBITDA1	186		$	201
Capital expenditures	20		$	28
OSB (MMsf 3/8” basis)
Production	954			1,035
Shipments	977			1,010
- exchange rate
Closing rate	0.8298			0.7400
Average rate	0.8083			0.7268

All values are in US Dollars.

1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure. 2021 Adjusted EBITDA was decreased by a<br>one-time charge of $7 million related to inventory purchase price accounting.

Our Europe EWP segment includes our U.K. and Belgium OSB, MDF, and particleboard operations effective February 1, 2021. Revenues and expenses of our European operations, which have British pound sterling and Euro functional currencies, are translated at the average rate of exchange prevailing during the period.

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Sales and Shipments

Sales increased compared to 2021 due to higher product pricing in local currency terms, offset in part by lower shipment volumes and the strengthening of the USD against the GBP.

The price variance resulted in an increase in earnings before tax and Adjusted EBITDA of $136 million compared to 2021. The price variance represents the impact of changes in product pricing in local currency terms, with any associated foreign exchange impact from the strengthening or weakening of the GBP against USD presented under Other in the Adjusted EBITDA variance table.

Shipment volumes decreased versus 2021 due to reductions in operating schedules to balance inventory as demand weakened in the second half of the year. The inclusion of an additional month of shipments provided a partial offsetting impact compared to 2021. The volume variance resulted in a decrease of $37 million compared to 2021.

Costs and Production

Production volumes decreased compared to 2021 due to the impacts of reductions in operating schedules described above. The inclusion of an additional month of production in 2022 provided a partial offsetting impact.

Costs of products sold increased compared to 2021 due primarily to higher input costs, offset in part by lower shipment volumes. Energy and resin costs accounted for the most significant components of input cost increases year over year, driven by constraints on availability and increasing natural gas costs. Fibre costs also increased compared to 2021. The impact of a one-time charge of $7 million related to inventory purchase price accounting in 2021 and sales of carbon allowances provided a partial offsetting impact in the year over year comparison.

Freight and other distribution costs increased compared to 2021 due primarily to the impact of higher fuel prices.

Amortization decreased compared to 2021 as certain assets reached the end of their estimated useful lives. The inclusion of an additional month of results provided an offsetting impact compared to 2021.

Selling, general and administration costs increased compared to 2021 due primarily to the inclusion of an additional month of results.

Restructuring and impairment charges of $15 million were recorded in 2022 relating to our South Molton, England location, driven by a decline in demand from a key customer for our kitchen cabinet products.

Finance expense and Other were comparable to prior periods.

Earnings before tax for the Europe EWP Segment increased by $6 million compared to 2021 due to the reasons explained above.

Adjusted EBITDA for the Europe EWP Segment decreased by $15 million from 2021. The following table shows the Adjusted EBITDA variance for the period. The variances presented represent the impact of changes in price, volume and cost in local currency terms, with any associated foreign exchange impact from the strengthening or weakening of the GBP against USD presented under Other. The impact of the sale of carbon allowances during 2022 is also included under Other.

Adjusted EBITDA ($ millions)	2021 to 2022
Adjusted EBITDA - comparative period	$	201
Price		136
Volume		(37	)
Changes in costs		(125	)
Other		11
Adjusted EBITDA - current period	$	186

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Discussion & Analysis of Specific Items

Selling, general and administration

Selling, general and administration costs for 2022 were $365 million (2021 - $312 million).

Selling, general and administration costs increased compared to 2021 due to higher salaries and wages, increased travel, higher professional fees relating to ongoing integration activities, and the inclusion of an additional month of operating expenses relating to our OSB team. Selling, general and administration costs in 2021 included professional fees incurred for the Norbord Acquisition, which partially offset the aforementioned increases.

Selling, general and administration expense related to our operating segments are also discussed under “Discussion & Analysis of Annual Results by Product Segment”.

Equity-based compensation

Our equity-based compensation includes our share purchase option, phantom share unit, and deferred share unit plans (collectively, the “Plans”), all of which had been partially hedged by an equity derivative contract during 2021. The equity derivative matured in December 2021 and was closed out. Our Plans are fair valued at each period-end, and the resulting expense or recovery is recorded over the vesting period.

The Plans include those equity-based plans assumed from Norbord as part of the Norbord Acquisition. The assumed Norbord share purchase option plans (“Assumed Option Plans”) were fair valued at the Norbord Acquisition date. From February 1 to April 20, 2021, the Assumed Option Plans were accounted for as equity-settled plans. On April 20, 2021, our board of directors approved a change to allow the Assumed Option Plans holders the right to elect to receive a cash payment in lieu of exercising an option to purchase Common shares. The change required us to fair value the Assumed Option Plan on April 20, 2021 and convert from equity-based accounting to cash-settled accounting for the Assumed Option Plans. Cash-settled accounting is consistent with the West Fraser option plan. Any changes in fair value from April 20, 2021 onwards will result in an expense or recovery over the vesting period in the same manner as the rest of our Plans. This change to the Assumed Option Plans did not in any way affect the value of the instruments to the holders.

Our valuation models consider various factors, with the most significant being the change in the market value of our shares from the beginning to the end of the relevant period. The expense or recovery does not necessarily represent the value that the holders of options and units will ultimately receive.

We recorded an expense of $5 million during 2022 (2021 - expense of $40 million). The expense for 2022 was influenced by changes in the price of our Common shares, vesting of granted units, and changes in the expected payout multiple on our performance share units. The expense for 2021 reflects the impacts of the Assumed Option Plans and an increase in the price of our Common shares traded on the TSX during the year, offset in part by a recovery relating to our equity derivative contract.

Finance expense, net

Finance expense, net includes interest earned on short-term investments and interest income recognized on our duty deposits as discussed under “Discussion & Analysis of Annual Results by Product Segment - Lumber Segment - Softwood Lumber Dispute”. The paragraph below discusses finance expense, net on a consolidated basis.

Finance expense, net decreased compared to 2021 due primarily to additional interest incurred on the Norbord senior notes for the two months following the Norbord Acquisition prior to their redemption in Q2-21 and the write-off of deferred financing costs related to prior credit facilities that were extinguished upon the execution of our $1 billion revolving credit facility in Q3-21. Higher interest income on our short-term investments in 2022 was also a contributing factor.

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Other

Other income of $37 million was recorded in 2022 (2021 - other expense of $2 million). Other income in 2022 relates primarily to foreign exchange gains recorded on our CAD-denominated monetary assets and liabilities and mark-to-market gains on our interest rate swap contracts.

Other income of $14 million was recorded for our Corporate & Other segment in 2022 (2021 - other expense of $5 million).

Other income for our Corporate & Other segment in 2022 relates primarily to mark-to-market gains on our interest rate swap contracts and foreign exchange gains recorded on certain of our CAD-denominated monetary assets and liabilities held within the Corporate & Other segment, offset in part by consolidation eliminations for intercompany transactions relating to our NA EWP segment.

Other related to our operating segments are discussed under “Discussion & Analysis of Annual Results by Product Segment”.

Income tax

We recorded an income tax expense in 2022 of $618 million compared to $951 million in 2021. The effective tax rate was 24% in 2022 compared to 24% in 2021. Note 19 to the Annual Financial Statements provides a reconciliation of income taxes calculated at the statutory rate to the income tax expense.

Other comprehensive earnings – translation of operations with different functional currencies

Our European operations have British pound sterling and Euro functional currencies and our jointly-owned newsprint operation has a Canadian dollar functional currency. Assets and liabilities of these entities are translated at the rate of exchange prevailing at the reporting date, and revenues and expenses at average rates during the period. Gains or losses on translation are included as a component of shareholders’ equity in accumulated other comprehensive loss.

We recorded a translation loss of $83 million during 2022 (2021 - translation loss of $9 million).

In general, a strengthening (weakening) of the USD against the Canadian dollar, British pound sterling or Euro results in a translation loss (gain). The translation loss in the current year reflects a strengthening of the USD against the CAD, British pound sterling and Euro for our European and jointly-owned newsprint operations.

Other comprehensive earnings – actuarial gains/losses on retirement benefits

The funded position of our defined benefit pension plans and other retirement benefit plans is estimated at the end of each period. The funded position, as shown in note 13 to the Annual Financial Statements, is determined by subtracting the value of the plan assets from the plan obligations.

We recorded an after-tax actuarial gain of $164 million during 2022 (2021 - after-tax actuarial gain of $153 million). The actuarial gain in 2022 reflects an increase in the discount rate used to calculate plan liabilities offset in part by lower returns on plan assets.

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FOURTH QUARTER RESULTS

Summary Fourth Quarter Results<br><br><br>($ millions)	Q4-22			Q3-22			Q4-21
Earnings
Sales	$	1,615		$	2,088		$	2,038
Cost of products sold		(1,209	)		(1,371	)		(1,158	)
Freight and other distribution costs		(209	)		(260	)		(207	)
Export duties, net		(29	)		53			30
Amortization		(148	)		(140	)		(153	)
Selling, general and administration		(98	)		(84	)		(88	)
Equity-based compensation		(6	)		(5	)		(12	)
Restructuring and impairment charges		(47	)		—			—
Operating earnings (loss)		(130	)		281			450
Finance income (expense), net		3			3			(1	)
Other		2			12			(11	)
Tax recovery (provision)		31			(80	)		(104	)
Earnings (loss)	$	(94	)	$	216		$	334
Adjusted EBITDA^1^	$	70		$	426		$	615
1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.
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Selected Quarterly Amounts<br><br><br>($ millions, unless otherwise indicated)	Q4-22			Q3-22		Q2-22		Q1-22		Q4-21		Q3-21		Q2-21		Q1-21
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Sales	$	1,615		$	2,088	$	2,887	$	3,110	$	2,038	$	2,358	$	3,779	$	2,343
Earnings (loss)		(94	)		216		762		1,090		334		460		1,488		665
Basic EPS (dollars)		(1.12	)		2.50		7.66		10.35		3.13		4.20		12.32		6.96
Diluted EPS (dollars)		(1.13	)		2.50		7.59		10.25		3.13		4.20		12.32		6.96

The Norbord Acquisition led to the incorporation of additional sales and earnings from our North American OSB and European EWP operations, which are reflected in our results from February 1, 2021 onwards. Pricing for our products reached record highs in Q2-21 before moderating in Q3-21. Pricing improved through Q4-21 and Q1-22, although these pricing gains were offset in part by lower shipments as a result of constraints on transportation availability. Subsequent decreases in sales and earnings through Q4-22 were driven primarily by decreases in lumber and OSB pricing, inventory write-downs, and restructuring and impairment charges. The cost inflation that impacted our results through Q3-22 moderated in Q4-22.

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Discussion & Analysis of Fourth Quarter Results by Product Segment

Lumber Segment

Lumber Segment Earnings<br><br><br>($ millions unless otherwise indicated)	Q4-22			Q3-22			Q4-21
Sales
Lumber	$	611		$	831		$	796
Wood chips and other residuals		73			84			70
Logs and other		17			20			22
		701			935			888
Cost of products sold		(607	)		(665	)		(546	)
Freight and other distribution costs		(92	)		(118	)		(93	)
Export duties, net		(29	)		53			30
Amortization		(51	)		(45	)		(45	)
Selling, general and administration		(51	)		(45	)		(39	)
Restructuring and impairment charges		(31	)		—			—
Operating earnings (loss)		(160	)		115			195
Finance income, net		2			5			1
Other income (expense)		(2	)		7			(2	)
Earnings (loss) before tax	$	(161	)	$	127		$	194
Adjusted EBITDA^1^	$	(77	)	$	160		$	240
SPF (MMfbm)
Production		594			649			720
Shipments		582			714			673
SYP (MMfbm)
Production		707			765			659
Shipments		713			764			632
1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure. Q4-21 Adjusted EBITDA was decreased by a one-time charge of $2 million related to inventory purchase price accounting.
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Sales and Shipments

Lumber sales were lower compared to Q3-22 due to lower product pricing and lower shipments. Q4-22 lumber sales were lower compared to Q4-21 due primarily to lower product pricing.

The price variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $132 million compared to Q3-22, and a decrease of $176 million compared to Q4-21.

SPF shipment volumes decreased 18% compared to Q3-22 due to weakening demand and reductions in production volumes, and decreased 14% compared to Q4-21, a quarter that saw shipments under significant downward pressure due to severe weather and flooding in B.C., which disrupted rail and truck services.

SYP shipment volumes decreased compared to Q3-22 due primarily to weakening demand and reductions in operating schedules to manage inventory. SYP shipment volumes increased compared to Q4-21 due primarily to the acquisition of the Angelina lumber mill on December 1, 2021 and ramp-up of production at our lumber mill in Dudley, Georgia, which began producing in the second quarter of 2021.

The volume variance resulted in a change in earnings before tax and Adjusted EBITDA of nil compared to Q3-22 and an increase of $3 million compared to Q4-21.

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	Q4-22		Q3-22		Q4-21
SPF Sales by Destination	MMfbm	%	MMfbm	%	MMfbm	%
U.S.	347	60%	481	67%	461	68%
Canada	213	37%	213	30%	128	19%
China	5	1%	—	—%	60	9%
Other	17	2%	20	3%	24	4%
	582		714		673

We ship SPF to several export markets, while our SYP sales are almost entirely within the U.S. The relative proportion of shipments of SPF to China was comparable to Q3-22 as demand from the construction industry remained muted as pandemic-related lockdowns in the country slowed economic activity. This, along with the strengthening of the USD against the Chinese renminbi, additional restrictions implemented on Chinese ports, and ongoing container shortages have driven the decrease in SPF shipments to China compared to Q4-21.

Wood chip, log, and other residual sales remained broadly consistent to comparative periods.

Costs and Production

SPF production volumes were lower versus comparative periods due primarily to the impact of the previously announced permanent curtailment of one shift at our Fraser Lake and Williams Lake sawmills and reductions in operating schedules to manage inventory levels.

SYP production volumes decreased compared to Q3-22 due primarily to reductions in operating schedules to manage inventory levels. SYP production volumes increased compared to Q4-21 due primarily to the acquisition of the Angelina lumber mill and ramp-up of production at our lumber mill in Dudley, Georgia.

Costs of products sold were lower compared to Q3-22 due primarily to lower shipment volumes and lower per unit log costs, offset in part by higher manufacturing costs in both our Canadian and U.S. operations and $32 million of incremental inventory write-downs recorded in Q4-22. We recorded significant inventory valuation reserves in Q4-22 due to low product pricing at period-end.

Costs of products sold were higher compared to Q4-21 due primarily to higher SPF log costs, higher manufacturing costs in both our Canadian and U.S. operations, and $47 million of incremental inventory write-downs recorded in Q4-22.

SPF log costs in Q4-22 decreased compared to Q3-22 due primarily to lower Alberta stumpage rates. SPF log costs increased compared to Q4-21 due primarily to higher purchased log costs in B.C. and increases in logging and fuel costs, offset in part by a decrease in overall stumpage rates.

SPF unit manufacturing costs increased versus comparative periods due primarily to lower production in the current period. We ran our mills in Western Canada at 70% of capacity in Q4-22, down from 76% of capacity in Q3-22 and 85% of capacity in Q4-21. As operating schedules were selectively reduced, a higher proportion of our Q4-22 production related to lower cost mills and this partially offset the aforementioned cost impact. Inflationary pressures on inputs was a contributing factor to the increase versus Q4-21 also.

SYP log costs decreased compared to Q3-22 as competition for logs moderated with weakening market conditions for lumber. SYP log costs were higher compared to Q4-21 due to increased competition for logs year over year. SYP unit manufacturing costs increased compared to Q3-22 due primarily to lower production in the current period. SYP unit manufacturing costs increased compared to Q4-21 due primarily to higher supplies and materials, energy, and employee costs.

Freight and other distribution costs decreased compared to Q3-22 due to decreases in shipment volumes, lower trucking and rail rates, and lower fuel costs. Freight and other distribution costs were comparable to Q4-21.

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We recorded export duty expense in Q4-22, compared to export duty recoveries in the comparative periods, which were attributable to the finalization of AR2 and AR3 in Q4-21 and Q3-22 respectively.

As disclosed in the table below, the effective duty expense for Q4-22 increased versus comparative quarters. In Q4-22, higher antidumping duties incurred during the quarter was offset in part by lower shipment volumes to the U.S. and lower pricing.

The following table reconciles our cash deposits paid during the period to the amount recorded in our statements of earnings:

Duty impact on earnings ($ millions)	Q4-22
Cash deposits paid^1^		(12)	(23)	(20)
Adjust to West Fraser Estimated ADD rate^2^		(17)	(5)	(5)
Effective duty expense for period^3^		(29)	(28)	(25)
Duty recovery attributable to AR2^4^		—	—	55
Duty recovery attributable to AR3^5^		—	81	—
Export duty (expense) recovery		(29)	53	30
Net interest income on duty deposits<br>receivable		3	7	7
1.	Represents combined CVD and ADD cash deposit rate of 8.97% for January 1, 2021 to December 1, 2021, 11.12% from<br>December 2, 2021 to January 9, 2022, 11.14% from January 10, 2022 to August 8, 2022, and 8.25% from August 9, 2022 to December 31, 2022.
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2.	Represents adjustment to the annualized West Fraser Estimated ADD rate of 4.52% for<br>Q4-22, 2.23% for Q3-22, and 6.80% for Q4-21.
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3.	The total represents the combined CVD cash deposit rate and West Fraser Estimated ADD rate of 14.37% for January 1,<br>2021 to December 1, 2021, 11.86% for December 2, 2021 to December 31, 2021, 9.58% for January 1, 2022 to January 9, 2022, 9.60% from January 10, 2022 to August 8, 2022, and 8.14% from August 9, 2022 to<br>December 31, 2022.
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4.	$55 million represents the duty recovery attributable to the finalization of AR2 duty rates for the 2019 POI.<br>
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5.	$81 million represents the duty recovery attributable to the finalization of AR3 duty rates for the 2020 POI.<br>
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The increase in amortization expense versus comparative periods related to continuing capital investments in our U.S. operations. Incremental amortization related to the acquired Angelina lumber mill was also a contributing factor to the increase versus Q4-21.

Selling, general and administration costs increased versus comparative periods. The increase versus Q3-22 related to higher salaries and wages, increased travel, and increased levels of community investment. The increase versus Q4-21 was driven by similar factors as well as updates in the allocation methodology for corporate overhead costs.

Restructuring and impairment charges of $31 million were recorded in Q4-22 relating to the indefinite curtailment of operations at our Perry sawmill.

Q4-22 finance income, net included $3 million of interest income on export duties. We accrued $7 million of interest income in Q3-22 and Q4-21 related primarily to the finalization of our AR3 and AR2 duty rates in those periods. Finance income excluding these amounts was comparable to Q3-22. Finance income excluding these amounts were also impacted by a lower allocation of consolidated finance expense, net compared to Q4-21.

Other relates primarily to foreign exchange revaluations on the Canadian dollar monetary assets and liabilities held by our Canadian operations.

Earnings before tax for the Lumber Segment decreased by $288 million compared to Q3-22 and decreased by $355 million compared to Q4-21 for the reasons explained above.

Adjusted EBITDA for the Lumber Segment decreased by $237 million compared to Q3-22 and decreased by $317 million compared to Q4-21. The following table shows the Adjusted EBITDA variance for the period.

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Adjusted EBITDA ($ millions)	Q3-22 to Q4-22			Q4-21 to Q4-22
Adjusted EBITDA - comparative period	$	160		$	240
Price		(132	)		(176	)
Volume		—			3
Changes in export duties		(83	)		(59	)
Changes in costs		20			(44	)
Impact of inventory write-downs		(32	)		(47	)
Other		(10	)		6
Adjusted EBITDA - current period	$	(77	)	$	(77	)

NorthAmerica Engineered Wood Products Segment

NA EWP Segment Earnings<br><br><br>($ millions unless otherwise indicated)	Q4-22			Q3-22			Q4-21
Sales
OSB	$	447		$	596		$	666
Plywood, LVL and MDF		157			194			162
Wood chips, logs and other		6			8			6
		610			798			834
Cost of products sold		(397	)		(468	)		(398	)
Freight and other distribution costs		(76	)		(92	)		(72	)
Amortization		(73	)		(71	)		(73	)
Selling, general and administration		(27	)		(23	)		(21	)
Operating earnings		35			144			270
Finance income (expense), net		1			(2	)		—
Other income (expense)		3			2			(5	)
Earnings before tax	$	40		$	144		$	265
Adjusted EBITDA^1^	$	109		$	215		$	343
OSB (MMsf 3/8” basis)
Production		1,442			1,560			1,469
Shipments		1,409			1,600			1,543
Plywood (MMsf 3/8” basis)
Production		162			194			175
Shipments		181			193			190
1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.
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Our NA EWP segment includes our North American OSB, plywood, MDF, and LVL operations.

Sales and Shipments

Sales decreased versus both comparative periods due primarily to lower OSB pricing and shipment volumes. Lower sales of MDF and plywood were also contributing factors to the decrease compared to Q3-22, driven primarily by lower shipment volumes. Shipment volumes decreased in Q4-22 due to weakening demand.

The price variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $100 million compared to Q3-22, and a decrease of $182 million compared to Q4-21.

The volume variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $24 million compared to Q3-22, and a decrease of $19 million compared to Q4-21.

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Costs and Production

OSB production volumes decreased versus both comparative periods due primarily to incremental production curtailments taken to manage inventory levels.

Plywood production volumes decreased versus both comparative periods due primarily to the impact of the previously announced permanent curtailment of one shift at our Quesnel Plywood mill.

Costs of products sold decreased compared to Q3-22 due primarily to lower shipment volumes, recognition of $14 million in insurance recoveries, and decreases in resin and energy costs as cost inflation across our inputs moderated. The recognition of insurance recoveries partially offset repair costs and lost margins charged to earnings in Q4-21 and Q1-22 relating to unscheduled downtime at one of our manufacturing locations. We recorded $3 million of incremental inventory write-downs in Q4-22 compared to Q3-22.

Costs of products sold remained comparable to Q4-21 as the impacts of lower shipment volumes and the insurance recovery proceeds were largely offset by higher resin, energy, and fibre costs. Resin accounted for the most significant component of input cost increases year over year, driven by constraints on availability.

Freight and other distribution costs decreased compared to Q3-22 due primarily to lower shipment volumes. Freight and other distribution costs increased compared to Q4-21 due to higher fuel costs, inflationary pressures, and the substitution of trucking services for rail services. Lower shipment volumes compared to Q4-21 provided a partial offsetting effect.

Amortization expense was comparable to Q3-22 and Q4-21.

Selling, general and administration costs increased compared to Q3-22 due to higher salaries and wages and increased travel. The increase versus Q4-21 was driven by similar factors as well as updates in the allocation methodology for corporate overhead costs.

We recorded finance income in Q4-22 due to the impacts of higher interest income earned on our short-term investments. Fluctuations in Other related primarily to intercompany transactions that eliminate upon consolidation through an offsetting balance in the Corporate & Other segment and foreign exchange movements recorded on CAD-denominated monetary assets and liabilities.

Earnings before tax for the NA EWP Segment decreased by $104 million compared to Q3-22 and decreased by $225 million compared to Q4-21 due to the reasons explained above.

Adjusted EBITDA for the NA EWP Segment decreased by $106 million compared to Q3-22 and decreased by $234 million compared to Q4-21. The following table shows the Adjusted EBITDA variance for the period. The impact of the insurance recovery recorded in Q4-22 is included under Other.

Adjusted EBITDA ($ millions)	Q3-22 to Q4-22			Q4-21 to Q4-22
Adjusted EBITDA - comparative period	$	215		$	343
Price		(100	)		(182	)
Volume		(24	)		(19	)
Changes in costs		4			(49	)
Other		14			16
Adjusted EBITDA - current period	$	109		$	109

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Pulp & Paper Segment

Pulp & Paper Segment Earnings<br><br><br>($ millions unless otherwise indicated)	Q4-22			Q3-22			Q4-21
Sales	$	190		$	233		$	159
Cost of products sold		(136	)		(155	)		(132	)
Freight and other distribution costs		(32	)		(41	)		(33	)
Amortization		(9	)		(9	)		(9	)
Selling, general and administration		(8	)		(8	)		(8	)
Restructuring and impairment charges		—			—			—
Operating earnings (loss)		6			20			(23	)
Finance expense		—			(1	)		—
Other income (expense)		(5	)		3			(2	)
Earnings (loss) before tax	$	1		$	22		$	(25	)
Adjusted EBITDA^1^	$	15		$	29		$	(14	)
Pulp (Mtonnes)
Production		221			255			226
Shipments		217			256			231
1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.
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Sales and Shipments

Sales decreased compared to Q3-22 due primarily to decreases in shipment volumes and, to a lesser extent, lower product pricing. Sales increased compared to Q4-21 due to higher product pricing, offset in part by decreases in shipment volumes.

The price variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $14 million compared to Q3-22 and an increase of $40 million compared to Q4-21.

Pulp shipments decreased versus comparative periods due to reductions in production volumes, discussed further in the section below. The volume variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $3 million compared to Q3-22 and a decrease of $2 million compared to Q4-21.

Costs and Production

Pulp production decreased compared to Q3-22 due to the transition of the Hinton pulp mill from a double-line NBSK producer to a single-line UKP producer in October 2022, and the previously announced Q4-22 curtailment at Cariboo Pulp & Paper to align operating capacity with the available supply of wood chips. Pulp production was comparable to Q4-21 as the impact of the aforementioned reductions in Q4-22 was similar to the impact of the Q4-21 production curtailments taken in response to severe weather and flooding in B.C.

Costs of products sold decreased compared to Q3-22 due primarily to decreases in shipment volumes. Costs of products sold was comparable to Q4-21 as the impacts of higher fibre and energy costs were largely offset by lower shipment volumes.

Freight and other distribution costs decreased compared to Q3-22 due to lower shipment volumes and lower container and rail rates. Freight and other distribution costs decreased compared to Q4-21 due to lower shipment volumes.

Amortization, selling, general, and administration costs, and finance expense were similar to comparative periods. Other expense in Q4-22 relates to foreign exchange revaluations on Canadian dollar monetary assets and liabilities and settlement costs relating to pension plan annuity purchase agreements for certain retired employees.

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Earnings before tax for the Pulp & Paper Segment decreased by $21 million compared to Q3-22 and increased by $26 million compared to Q4-21 due to the reasons explained above.

Adjusted EBITDA for the Pulp & Paper Segment decreased by $14 million compared to Q3-22 and increased by $29 million compared to Q4-21. The following table shows the Adjusted EBITDA variance for the period.

Adjusted EBITDA ($ millions)	Q3-22 to Q4-22			Q4-21 to Q4-22
Adjusted EBITDA - comparative period	$	29		$	(14	)
Price		(14	)		40
Volume		(3	)		(2	)
Changes in costs		(4	)		(14	)
Other		7			5
Adjusted EBITDA - current period	$	15		$	15

EuropeEngineered Wood Products Segment

Europe EWP Segment Earnings<br> ( millions unless otherwise indicated)			Q3-22			Q4-21
Sales	142		$	149		$	184
Cost of products sold	(97	)		(110	)		(109	)
Freight and other distribution costs	(9	)		(9	)		(9	)
Amortization	(12	)		(12	)		(24	)
Selling, general and administration	(7	)		(6	)		(5	)
Restructuring and impairment charges	(15	)		—			—
Operating earnings	3			12			37
Finance expense	—			—			(1	)
Other income (expense)	(2	)		1			—
Earnings before tax	1		$	13		$	36
Adjusted EBITDA1	30		$	24		$	61
OSB (MMsf 3/8” basis)
Production	184			208			194
Shipments	201			202			178
- exchange rate
Closing rate	0.8298			0.9079			0.7400
Average rate	0.8512			0.8506			0.7415

All values are in US Dollars.

1.	This is a non-GAAP financial measure. Refer to the<br>“Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Our Europe EWP segment includes our U.K. and Belgium OSB, MDF, and particleboard operations. Revenues and expenses of our European operations, which have British pound sterling and Euro functional currencies, are translated at the average rate of exchange prevailing during the period.

Sales and Shipments

Sales decreased compared to Q3-22 due primarily to lower shipments of MDF and particleboard. Pricing for our products remained broadly consistent in local currency terms. Sales decreased compared to Q4-21 as a result of lower product pricing and lower shipment volumes of MDF and particleboard, offset in part by higher shipment volumes of OSB. The strengthening of the USD against the GBP also contributed to the decrease in sales compared to Q4-21.

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The price variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $1 million compared to Q3-22

and a decrease of $9 million compared to Q4-21. The price variance represents the impact of changes in product pricing in local currency terms, with any associated foreign exchange impact from the strengthening or weakening of the GBP against USD presented under Other in the Adjusted EBITDA variance table.

OSB shipment volumes were comparable to Q3-22 and increased compared to Q4-21. Q4-21 volumes were negatively impacted by a more pronounced seasonal slowing of demand for OSB late in the quarter as customers managed-down inventory following very high levels of activity in Q3-21. MDF and particleboard shipment volumes decreased versus both comparative quarters due to reductions in operating schedules taken in Q4-22 to manage inventory as demand weakened.

The volume variance resulted in a decrease in earnings before tax and Adjusted EBITDA of $7 million compared to Q3-22 and a decrease of $8 million compared to Q4-21.

Costs and Production

Production volumes decreased versus comparative periods due to the impacts of reductions in operating schedules described above.

Costs of products sold decreased versus comparative periods. The decrease in costs of products sold compared to Q3-22 related to lower shipment volumes, lower energy prices, and the inclusion of a $7 million gain from the sale of carbon allowances during Q4-22 as a recovery in costs of products sold. Energy prices moderated from levels in Q3-22 due to a mild winter and higher gas supplies in Europe.

The decrease in costs of products sold compared to Q4-21 related primarily to lower shipment volumes, sales of carbon allowances in Q4-22, and the strengthening of the USD against the GBP, offset in part by higher energy, resin, and fibre costs.

Freight and other distribution costs generally trended with changes in shipment volumes.

Amortization was comparable to Q3-22. Amortization decreased compared to Q4-21 as certain assets reached the end of their estimated useful lives.

Restructuring and impairment charges of $15 million was recorded in Q4-22 relating to our South Molton, England location, driven by a decline in demand from a key customer for our kitchen cabinet products.

Selling, general and administration costs, finance expense, and Other were consistent with comparable periods.

Earnings before tax for the Europe EWP Segment decreased by $12 million compared to Q3-22 and decreased by $35 million compared to Q4-21 due to the reasons explained above.

Adjusted EBITDA for the Europe EWP Segment increased by $6 million compared to Q3-22, and decreased by $31 million compared to Q4-21. The following table shows the Adjusted EBITDA variance for the period. The variances presented represent the impact of changes in price, volume and cost in local currency terms, with any associated foreign exchange impact from the strengthening or weakening of the GBP against USD presented under Other. The impact of the sale of carbon allowances during Q4-22 is also included under Other.

Adjusted EBITDA ($ millions)	Q3-22 to Q4-22			Q4-21 to Q4-22
Adjusted EBITDA - comparative period	$	24		$	61
Price		(1	)		(9	)
Volume		(7	)		(8	)
Changes in costs		8			(15	)
Other		6			1
Adjusted EBITDA - current period	$	30		$	30

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Discussion & Analysis of Specific Items

Selling, general and administration

Selling, general and administration costs for Q4-22 was $98 million (Q3-22 - $84 million and Q4-21 - $88 million).

Selling, general and administration costs increased compared to Q3-22 due to higher salaries and wages, increased travel, and increased levels of community investment. The increase versus Q4-21 was driven by similar factors.

Selling, general and administration expense related to our operating segments are also discussed under “Discussion & Analysis of Fourth Quarter Results by Product Segment”.

Equity-based compensation

We recorded an expense of $6 million during Q4-22 (Q3-22 - expense of $5 million; Q4-21 - expense of $12 million). The expense in the current quarter reflects an increase in the expected payout multiple on our performance share units.

Finance income (expense), net

Finance income, net includes interest earned on short-term investments and interest income recognized on our duty deposits as discussed under “Discussion & Analysis of Fourth Quarter Results by Product Segment - Lumber Segment”. The paragraph below discusses finance income (expense), net on a consolidated basis.

We recorded finance income, net of $3 million in Q4-22 compared to finance income, net of $3 million in Q3-22 and finance expense, net of $1 million in Q4-21. Finance income increased versus comparative periods due to the impacts of higher interest income earned on our short-term investments, offset in part by a reduction in interest income on export duties. We accrued $7 million of interest income in Q3-22 and Q4-21 related primarily to the finalization of our AR3 and AR2 duty rates in those periods.

Other

Other income of $2 million was recorded in Q4-22 (Q3-22 - other income of $12 million; Q4-21 - other expense of $11 million).

Other income in Q4-22 relates primarily to foreign exchange gains recorded on our CAD-denominated monetary assets and liabilities, offset in part by settlement costs relating to pension plan annuity purchase agreements for certain retired employees.

Other income of $8 million was recorded for our Corporate & Other segment in Q4-22 (Q3-22 - other expense of $1 million; Q4-21 - other expense of $2 million).

Other income for our Corporate & Other segment in Q4-22 relates primarily to foreign exchange gains recorded on certain of our CAD-denominated monetary assets and liabilities held within the Corporate & Other segment, offset in part by consolidation eliminations for intercompany transactions relating to our NA EWP segment.

Other related to our operating segments are discussed under “Discussion & Analysis of Fourth Quarter Results by Product Segment”.

Income tax

Q4-22 results include an income tax recovery of $31 million, compared to income tax expense of $80 million in Q3-22 and $104 million in Q4-21, resulting in an effective tax rate of 25% in the current quarter compared to 27% in Q3-22 and 24% in Q4-21.

Othercomprehensive earnings – translation of operations with different functional currencies

We recorded a translation gain of $50 million during Q4-22 (Q3-22 - translation loss of $62 million; Q4-21 - translation gain of $3 million).

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In general, a strengthening (weakening) of the USD against the Canadian dollar, British pound sterling or Euro results in a translation loss (gain). The translation gain in the current quarter reflects a weakening of the USD against the CAD, British pound sterling and Euro for our European and jointly-owned newsprint operations.

Other comprehensive earnings – actuarial gains/losses on retirement benefits

We recorded an after-tax actuarial gain of $15 million during Q4-22 (Q3-22 - after-tax actuarial loss of $14 million; Q4-21 - after-tax actuarial gain of $8 million). The actuarial gain in Q4-22 reflect an increase in the discount rate used to calculate our plan liabilities.

OUTLOOK AND OPERATIONS

Business Outlook

Markets

Several key trends that have served as positive drivers in recent years are expected to continue to support medium and longer-term demand for new home construction in North America.

The most significant uses for our North America lumber, OSB and wood panel products are residential construction, repair and remodelling and industrial applications. Over the medium term, we expect that an aging housing stock, the backlog of homes to be built due to lagging completions of previously started new home construction and greater entrenchment of work-from-home flexibility will help to offset near-term headwinds and spur repair and renovation spending that supports lumber, plywood and OSB demand. Over the longer term, growing market penetration of mass timber in industrial and commercial applications is also expected to become a more significant source of demand growth for wood building products in North America.

The seasonally adjusted annualized rate of U.S. housing starts averaged 1.38 million units in December 2022, with permits issued averaging 1.33 million units, according to the U.S. Census Bureau. Demand for new home construction and our wood building products may decline in the near term should interest rates remain elevated or continue to rise and consequently impact consumer sentiment and housing affordability.

The demand for our European products is expected to remain robust over the longer term as use of OSB as an alternative to plywood grows. Further, an aging housing stock supports long-term repair and renovation spending and additional demand for our wood building products. Near-term challenges, including relatively high and rising interest rates, ongoing geopolitical developments and inflationary pressures, are expected to cause a temporary slowing of demand for our products in Europe, however, we are confident that we will be able to navigate through these periods and respond to opportunities for long-term growth ahead.

Our BCTMP, NBSK and UKP pulp is primarily used in printing and writing paper, boxboard, tissue applications, paper grocery bags and other specialty products. Pulp demand is anticipated to grow over the longer term due to increasing boxboard and tissue production in Asia and greater substitution of single-use plastics that are subject to increasing risk from government restrictions. Recently, there have been industry announcements of both temporary and permanent pulp capacity reductions in Western Canada as a result of constrained access to fibre. We continue to ramp production of UKP at our pulp mill in Hinton, Alberta, which offers environmental benefits such as reduced greenhouse gas emissions, water use, air emissions and waste generation and elimination of chlorine dioxide emissions.

Softwood lumber dispute

Canadian softwood lumber exports to the U.S. have been the subject of trade disputes and managed trade arrangements for several decades. Countervailing and antidumping duties have been in place since April 2017, and we are required to make deposits in respect of these duties. Whether and to what extent we can realize a selling price to recover the impact of duties payable will largely depend on the strength of demand for softwood lumber. The USDOC published the final rates for Administrative Review 3 (“AR3”) in Q3-22. AR4 commenced in March 2022, with final rates expected in August 2023. Additional details can be found under the section “Discussion & Analysis of Annual Results by Product Segment - Lumber Segment - Softwood Lumber Dispute”.

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Operations

Anticipated shipment levels assume no significant deterioration from current market demand conditions, sufficient availability of logs within our economic return criteria, and no further temporary, indefinite or permanent curtailments. Our operations and results could be negatively affected by increasing or elevated interest rates, softening demand, the availability of transportation, the availability of labour due to the continuing impacts of COVID-19, disruption to the global economy resulting from the conflict in the Ukraine, inflationary pressures, including increases in energy prices, adverse weather conditions in our operating areas, intense competition for logs, elevated stumpage fees and production disruptions due to other uncontrollable factors.

We expect total lumber shipments in 2023 to be similar to 2022 levels as the transportation challenges that we faced last year are not expected to be as severe in 2023, offset by relative year-over-year softness in new home construction demand, the permanent B.C. mill curtailments announced in August 2022 and the indefinite curtailment of the Perry, Florida sawmill announced in January 2023. As such we expect 2023 SPF shipments to be 2.6 to 2.8 billion board feet, and in the U.S. South, we expect 2023 SYP shipments to be 2.9 to 3.1 billion board feet. On January 1, 2023, stumpage rates decreased in B.C. due to the market-based adjustments related to lumber prices, and given the current commodity price environment, B.C. stumpage rates are expected to decline modestly in Q2-23. In Alberta, stumpage rates are expected to remain low as long as SPF prices remain depressed, as they are closely linked to the price of lumber and respond relatively quickly to changes in lumber prices. We expect log costs to moderate in the U.S. South in 2023.

In our NA EWP segment, we expect 2023 OSB shipments to be similar to 2022 levels and therefore we expect shipments of 5.9 to 6.2 billion square feet (3/8-inch basis) this year. Our modernization capital investment in Allendale is continuing. Given ongoing supply chain delays, the timing for a potential restart has moved to the end of the second quarter. We anticipate a ramp-up period of up to three years to meet targeted production and as such we do not anticipate the Allendale mill contributing materially to shipments in 2023. While there are near-term headwinds to demand, our overall OSB platform is expected to be better and lower cost with a modern Allendale facility operating. As with all our wood products operations, demand is a key input in determining our operating schedules across our manufacturing footprint. Input costs for the NA EWP business are expected to moderate in 2023.

Pulp & Paper segment shipments are not expected to increase from 2022 levels this year.

In our Europe EWP segment, we expect 2023 OSB shipments to be 1.0 to 1.2 billion square feet (3/8-inch basis), moderately above 2022 levels, as demand markets stabilize. Input costs for the Europe EWP business are expected to remain relatively elevated due primarily to higher energy and resin costs.

Across much of our supply chain in Q4-22, we experienced moderation of costs and availability constraints for raw materials such as resins and chemicals, transportation, and energy, though labour availability remained challenging. We expect these trends to persist over the near-term.

We will continue to regularly evaluate the factors above as well as evolving market conditions in making production decisions across the business.

Cash Flows

We anticipate levels of operating cash flows and available liquidity will support our capital spending estimate for 2023. Based on our current outlook, assuming no deterioration from current market demand conditions during the year and that there is no additional lengthening of lead times for projects underway or planned, we anticipate we will invest approximately $500 million to $600 million in 2023. Our total capital budget consists of various improvement projects and maintenance expenditures, projects focused on optimization and automation of the manufacturing process, and projects targeted to reduce greenhouse gas emissions. Expected capital expenditures^1^ in 2023 include approximately $100 million for the modernization of the Henderson, Texas lumber manufacturing facility.

We expect to maintain our investment grade debt rating and intend to preserve sufficient liquidity to be able to take advantage of strategic growth opportunities that may arise.

Our 2022 NCIB, which expires February 22, 2023, authorized us to purchase up to 10,194,000 Common shares of the Company. As of February 13, 2023, 10,194,000 shares have been repurchased, leaving no shares available to purchase until the February 22, 2023 expiry of the NCIB. An additional 281,115 shares were acquired in 2022 under our 2021 NCIB for a total repurchase of 10,475,115 shares for 2022.

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On June 7, 2022, we completed the 2022 SIB pursuant to which we purchased for cancellation a total of 11,898,205 Common shares at a price of $95.00 per share for an aggregate purchase price of $1.13 billion.

As of February 13, 2023, we have repurchased for cancellation 39,741,794 of the Company’s Common shares since the closing of the Norbord Acquisition on February 1, 2021 through the completion of the 2021 SIB, the 2022 SIB and normal course issuer bids, equalling 73% of the shares issued in respect of the Norbord Acquisition.

We have paid a dividend in every quarter since we became a public company in 1986 and expect to continue this practice. At the latest declared quarterly dividend rate of $0.30 per share, the total anticipated cash payment of dividends in 2023 is $100 million based on the number of Common and Class B Common shares outstanding on December 31, 2022.

We will continue to consider share repurchases with excess cash, subject to regulatory approvals, if we are satisfied that this will enhance shareholder value and does not compromise our financial flexibility.

1.	This is a supplementary financial measure. Refer to the “Non-GAAP and Other<br>Specified Financial Measures” section of this document for more information on this measure.

Estimated Earnings Sensitivity to KeyVariables

(based on 2022 shipment volumes - millions)
Factor
Lumber price	59
NA OSB price	58
Europe OSB price	9
Canadian - U.S. exchange rate2	18

All values are in US Dollars.

1.	Each sensitivity has been calculated on the basis that all other variables remain constant and is based on changes in our<br>realized sales prices.
2.	Represents the USD impact of the initial $0.01 change on CAD revenues and expenses. Additional changes are substantially,<br>but not exactly, linear.
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LIQUIDITY AND CAPITAL RESOURCES

Capital Management Framework

Our business is cyclical and is subject to significant changes in cash flow over the business cycle. In addition, financial performance can be materially influenced by changes in product prices and the relative values of the Canadian and U.S. dollars. Our objective in managing capital is to ensure adequate liquidity and financial flexibility at all times, particularly at the lower points in the business cycle.

Our main policy relating to capital management is to maintain a strong balance sheet and otherwise meet financial tests that rating agencies commonly apply for investment-grade issuers of public debt. Our debt is currently rated as investment grade by three major rating agencies.

We monitor and assess our financial performance to ensure that debt levels are prudent, taking into account the anticipated direction of the business cycle. When financing acquisitions, we combine cash on hand, debt, and equity financing in a proportion that is intended to maintain an investment-grade rating for debt throughout the cycle. Debt repayments are arranged, where possible, on a staggered basis that takes into account the uneven nature of anticipated cash flows. We have established committed revolving lines of credit that provide liquidity and flexibility when capital markets are restricted.

A strong balance sheet and liquidity profile, along with our investment-grade debt rating, are key elements of our goal to maintain a balanced capital allocation strategy. Priorities within this strategy include reinvesting in our operations across all market cycles to strategically enhance productivity, product mix, and capacity; maintaining a leading cost position; maintaining financial flexibility to capitalize on growth opportunities, including the pursuit of acquisitions and larger-scale strategic growth initiatives; and returning capital to shareholders through dividends and share repurchases.

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Liquidity and Capital Resource Measures

Our capital structure consists of Common share equity and long-term debt, and our liquidity includes our operating facilities.

Summary of Liquidity and Debt Ratios<br><br><br>($ millions, except as otherwise indicated)	December 31,<br><br><br>2022			December 31,<br><br><br>2021
Available liquidity
Cash and cash equivalents	$	1,162		$	1,568
Operating lines available (excluding newsprint operation)		1,053			1,025
Available liquidity	$	2,215		$	2,593
Total debt to total capital^1^		7	%		7	%
Net debt to total capital^1^		(9	%)		(16	%)
1.	This is a capital management measure. Refer to the “Non-GAAP and Other<br>Specified Financial Measures” section of this document for more information on this measure.
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Available liquidity on December 31, 2022 was $2,215 million (2021 - $2,593 million). Available liquidity includes cash and cash equivalents, cheques issued in excess of funds on deposit, and amounts available on our operating loans, excluding the demand line of credit dedicated to our 50% jointly-owned newsprint operation.

Cash and cash equivalents on hand decreased in 2022 due to lower earnings and significant returns of capital to our shareholders through share buybacks and dividend payments during the year. Available liquidity decreased and net debt to total capital increased compared to last year, but we remain well positioned with a strong balance sheet and liquidity profile. Total debt to total capital remained comparable to prior year.

Credit Facilities

As at December 31, 2022, our credit facilities consisted of a $1 billion committed revolving credit facility which matures July 2026, $35 million of uncommitted revolving credit facilities available to our U.S. subsidiaries, a $18 million (£15 million) credit facility dedicated to our European operations, and a $10 million (CAD$13 million) demand line of credit dedicated to our jointly-owned newsprint operation.

As at December 31, 2022, our revolving credit facilities were undrawn (December 31, 2021 - undrawn) and the associated deferred financing costs of $1 million (December 31, 2021 - $1 million) were recorded in other assets. Interest on the facilities is payable at floating rates based on Prime, Base Rate Advances, Bankers’ Acceptances, or London Inter-Bank Offered Rate (“LIBOR”) Advances at our option. Our $1 billion committed revolving credit facility contains transition provisions relating to the elimination of LIBOR whereby Secured Overnight Financing Rate (“SOFR”) can be elected by mutual consent with the lenders.

In addition, we have credit facilities totalling $131 million (December 31, 2021 - $137 million) dedicated to letters of credit. Letters of credit in the amount of $61 million (December 31, 2021 - $65 million) were supported by these facilities.

All debt is unsecured except the $10 million (CAD$13 million) jointly-owned newsprint operation demand line of credit, which is secured by that joint operation’s current assets.

As at December 31, 2022, we were in compliance with the requirements of our credit facilities.

Long-Term Debt

In October 2014, we issued $300 million of fixed-rate senior unsecured notes, bearing interest at 4.35% and due October 2024, pursuant to a private placement in the U.S. The notes are redeemable, in whole or in part, at our option at any time as provided in the indenture governing the notes.

In August 2017, we were advanced a $200 million 5-year term loan that, with the July 2019 extension, matures on August 25, 2024. Interest is payable at floating rates based on Base Rate Advances or LIBOR Advances at our option. This

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loan is repayable at any time, in whole or in part, at our option and without penalty but cannot be redrawn after payment.

On March 15, 2019, we entered into an interest rate swap agreement, maturing in August 2022, with a $100 million notional amount to limit our exposure to fluctuations in interest rates and fix interest rates on a portion of our 5-year term loan. On March 9, 2020, we extended the duration of our $100 million notional interest rate swap from August 2022 to August 2024, resulting in a change to the fixed interest rate on the swap from 2.47% to 1.78% through August 2024. On April 15, 2020, we entered into additional interest rate swaps for another notional amount of $100 million, resulting in a fixed interest rate of 0.51% through August 2024. These swap agreements fix the interest rate on the $200 million 5-year term loan discussed above.

Debt Ratings

We are considered investment grade by three leading rating agencies. The ratings in the table below are as at February 13, 2023.

Agency	Rating	Outlook
DBRS	BBB	Stable
Moody’s	Baa3	Stable
Standard & Poor’s	BBB-	Stable

These ratings are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the rating agencies.

Shareholder’s Equity

Our outstanding Common share equity consists of 81,273,936 Common shares and 2,281,478 Class B Common shares for a total of 83,555,414 shares issued and outstanding as at February 13, 2023.

The Common shares and Class B Common shares are equal in all respects, including the right to dividends, rights upon dissolution or winding up and the right to vote, except that each Class B Common share may at any time be exchanged for one Common share. Our Common shares are listed for trading on the TSX and NYSE under the symbol WFG, while our Class B Common shares are not. Certain circumstances or corporate transactions may require the approval of the holders of our Common shares and Class B Common shares on a separate class by class basis.

Share Repurchases

Normal Course Issuer Bid

On February 23, 2022, we renewed our normal course issuer bid (“NCIB”) allowing us to acquire up to 10,194,000 Common shares for cancellation until the expiry of the bid on February 22, 2023. As of December 31, 2022, we had repurchased and cancelled all 10,194,000 Common shares available under the 2022 NCIB.

For the year ended December 31, 2022, we repurchased 10,475,115 Common shares at an average price of $82.01 per share under our 2021 and 2022 NCIB programs.

2022 Substantial Issuer Bid

On June 7, 2022, we completed a substantial issuer bid pursuant to which we purchased for cancellation a total of 11,898,205 Common shares at a price of $95.00 per share for an aggregate purchase price of $1.13 billion.

2021 Substantial Issuer Bid

On August 20, 2021, we completed a substantial issuer bid pursuant to which we purchased for cancellation a total of 10,309,278 Common shares at a price of CAD$97.00 (US$76.84) per Common share for an aggregate purchase price of CAD$1.0 billion.

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The following table shows our purchases under our NCIB and SIB programs in 2021 and 2022:

Share repurchases<br><br><br>(number of common shares and price per share)
NCIB:	January 1, 2021 to December 31, 2021	7,059,196
2021 SIB:	August 20, 2021	10,309,278
NCIB:	January 1, 2022 December 31, 2022	10,475,115
2022 SIB:	June 7, 2022	11,898,205

All values are in US Dollars.

Share Options

As at February 13, 2023, there were 837,425 share purchase options outstanding with exercise prices ranging from CAD$40.82 to CAD$123.63 per Common share.

Cash Flow

Our cash is deployed primarily for operating purposes, interest payments, repayment of debt, investments in property, plant, equipment, acquisitions, share repurchases, and dividends. In normal business cycles and in years without a major acquisition or debt repayment, cash on hand and cash provided by operations have typically been sufficient to meet these uses.

We are exposed to commodity price changes. To manage our liquidity risk, we maintain adequate cash and cash equivalents balances and appropriate lines of credit. In addition, we regularly monitor and review both actual and forecasted cash flows. Refinancing risks are managed by extending maturities through regular renewals and refinancing when market conditions are supportive.

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Cash Flow Statement<br><br><br>($ millions - cash provided by (used in))	2022			2021
Cash provided by operating activities
Earnings	$	1,975		$	2,947
Adjustments
Amortization		589			584
Restructuring and impairment charges		60			—
Finance expense, net		3			45
Foreign exchange (gain) loss		(28	)		5
Export duty		(99	)		14
Retirement benefit expense		103			111
Contributions to retirement benefit plans		(76	)		(77	)
Tax provision		618			951
Income taxes paid		(982	)		(946	)
Other		(11	)		(13	)
Changes in non-cash working capital
Receivables		140			5
Inventories		20			(139	)
Prepaid expenses		(6	)		(14	)
Payables and accrued liabilities		(99	)		79
		2,207			3,552
Cash used for financing activities
Repayment of long-term debt		—			(667	)
Repayment of lease obligations		(14	)		(9	)
Make-whole premium paid		—			(60	)
Finance expense paid		(23	)		(37	)
Financing fees paid		—			(4	)
Repurchase of Common shares for cancellation		(1,990	)		(1,319	)
Issuance of Common shares		—			7
Dividends paid		(99	)		(75	)
		(2,126	)		(2,164	)
Cash used for investing activities
Acquired cash and cash equivalents from Norbord<br>Acquisition^1^		—			642
Angelina Acquisition, net of cash acquired		—			(302	)
Additions to capital assets		(477	)		(635	)
Interest received		17			2
Other		1			7
	$	(459	)	$	(286	)
Change in cash and cash equivalents	$	(378	)	$	1,102
1.	The Norbord Acquisition was a non-cash share consideration transaction and<br>therefore only the acquired cash is included in the cash flow statement. Changes in Norbord’s cash position subsequent to February 1, 2021 are incorporated into the cash flow statement.
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Operating Activities

The table above shows the main components of cash flows provided by operating activities for each year. The significant factor contributing to the decrease compared to 2021 was lower earnings, driven primarily by lower product pricing and higher input costs. Changes in working capital provided a partial offsetting factor.

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Income tax payments were higher in 2022 due primarily to a higher prior year top-up payment, as discussed below, and changes in installment levels. Canadian income tax installments are based on the lower of prior year installments and estimated taxable earnings, with the final or top-up payment due in February of the following year. U.S. income tax installments are based on estimated taxable earnings. Of the $982 million in income tax payments (net of refunds) paid in 2022, $328 million was the final income tax payment for 2021 earnings. Of the $946 million income tax payments (net of refunds) paid in 2021, $216 million was the final income tax payment for 2020 earnings.

Working capital decreased in 2022 due primarily to decreases in accounts receivable, offset in part by decreases in payables and accrued liabilities. Accounts receivable decreased due to lower product pricing and shipment activity. Accounts payable and accrued liabilities decreased due primarily to decreases in stumpage, trade accounts, and equity-based compensation and compensation accruals.

The decrease in inventory is driven primarily by inventory write-downs on log and lumber inventory, reductions in volumes of SPF and SYP lumber finished goods at year-end, and reductions in volumes of pulp raw materials and finished goods related to the transition of Hinton pulp mill to single-line production of UKP. Partially offsetting these reductions were increases in OSB finished goods and supplies inventory driven by increases in input costs and a lower comparative balance for OSB finished goods at 2021 year-end.

Financing Activities

Cash used in financing activities in 2022 was comparable to 2021 as lower repayments of long-term debt were largely offset by higher share repurchases and dividend payments. We completed the early redemption of Norbord’s 2023 and 2027 Notes in 2021 whereas no repayments of long-term debt took place in the current year.

We returned a total of $1,990 million during 2022 to our shareholders through Common shares repurchased under our NCIB and SIB programs, as compared to $1,319 million during 2021. 2022 share repurchases were higher compared to 2021 as we repurchased more shares at a higher average price per share in the current year.

We also returned a total of $99 million during 2022 to our shareholders through dividend payments (2021 - $75 million). The increase versus 2021 related to increases in the dividend amount per share, offset by a decrease in the number of shares outstanding.

Investing Activities

The Norbord Acquisition was a non-cash share consideration transaction and therefore only the acquired cash was included in investing activities in 2021. Cash payment of $302 million, representing the cash consideration transferred net of acquired cash, was made in relation to the Angelina Acquisition during 2021.

Interest received increased compared to 2021 due to higher interest income earned on our short-term investments.

Capital expenditures of $477 million in 2022 (2021 - $635 million) reflect our philosophy of continued reinvestment in our mills. Additions to capital assets in 2021 included $276 million relating to the asset acquisition of the idled OSB mill near Allendale, South Carolina. We increased profit improvement and maintenance capital expenditures in the North America EWP and U.S. lumber segments in 2022.

Capital Expenditures by Segment<br><br><br>**** ($ millions)	ProfitImprovement
Lumber		102	62	20	184
North America EWP		135	82	18	235
Pulp & Paper		2	26	1	29
Europe EWP		7	10	3	20
Corporate		—	9	—	9
Total		246	189	42	477
1.	Maintenance of business includes expenditures for roads, bridges, mobile equipment and major maintenance shutdowns.<br>
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Contractual Obligations

The estimated cash payments due in respect of contractual and legal obligations as at December 31, 2022, including debt and interest payments and major capital improvements, are summarized as follows. Contractual obligations do not include energy purchases under various agreements, defined contribution pension plans, equity-based compensation, or contingent amounts payable.

Contractual Obligations<br><br><br>(at December 31, 2022, in $ millions)	Total		2023			2024			2025			2026		Thereafter
Long-term debt	$	500	$	—		$	500		$	—		$	—	$	—
Interest on long-term debt^1^		33		19			14			—			—		—
Lease obligations		42		12			8			7			3		12
Contributions to defined benefit pension<br>plans^2^		120		36			43			41			—		—
Payables and accrued liabilities		722		722			—			—			—		—
Purchase commitments		278		278			—			—			—		—
Reforestation and decommissioning obligations		159		60			15			10			6		68
Electricity swaps		7		(1	)		(2	)		(1	)		1		10
Total	$	1,861	$	1,126		$	578		$	57		$	10	$	90
1.	Assumes debt remains at December 31, 2022 levels and includes the impact of interest rate swaps terminating August<br>2024.
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2.	Contributions to the defined benefit pension plans are based on the most recent actuarial valuation. Future contributions<br>will be determined at the next actuarial valuation date.
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Financial Instruments

Our financial instruments, their accounting classification, and associated risks are described in Note 23 to the Annual Financial Statements.

ACCOUNTING MATTERS

Critical Accounting Estimates and Judgments

The preparation of financial statements in conformity with IFRS requires management to make estimates, assumptions, and judgments that affect the amounts reported. Our significant accounting policies are disclosed in our Annual Financial Statements.

In determining our critical accounting estimates, we consider trends, commitments, events or uncertainties that we reasonably expect to materially affect our methodology or assumptions. Our statements in this MD&A regarding such considerations are made subject to the “Forward-Looking Statements” section.

We have outlined below information about judgments, assumptions, and other sources of estimation uncertainty as at December 31, 2022 that have the most significant impact on the amounts recognized in our financial statements. The discussion of each critical accounting estimate does not differ between our reportable segments unless explicitly noted.

Recoverability of Goodwill

Goodwill is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the business combination from which it arose. Goodwill exists in relation to our Lumber, North America EWP, and Europe EWP reporting segments.

Goodwill is tested annually for impairment, or more frequently if an indicator of impairment is identified.

Recoverability of goodwill is assessed by comparing the carrying value of the CGU or group of CGUs associated with the goodwill balance to its estimated recoverable amount, which is the higher of its estimated fair value less costs of disposal and its value in use.

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We determined the value in use of CGU groups using discounted cash flow models. Key assumptions used in estimating recoverable amount were based on industry sources as well as management estimates. Key assumptions included production volume, product pricing, raw material input cost, production cost, terminal multiple, and discount rate.

An impairment write-down is recorded if the carrying value exceeds the estimated recoverable amount.

We assessed the recoverability of goodwill as at December 31, 2022 and December 31, 2021 and concluded there were no impairment losses.

The estimates and assumptions regarding expected cash flows and the appropriate discount rates require considerable judgment and are based upon historical experience, approved financial forecasts and industry trends and conditions.

There is a material degree of uncertainty with respect to the estimates of the recoverable amounts of the CGU groups, given the necessity of making key economic and operating assumptions about the future. If the future were to differ adversely from our best estimate and associated cash flows were to materially decrease, we could potentially experience future impairment charges in respect of our goodwill balances.

Recoverability of Capital Assets

We assess property, plant and equipment, timber licences, and other definite-lived intangible assets for indicators of impairment at each reporting date and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We conduct a review of external and internal sources of information to assess for any impairment indicators. Examples of such triggering events related to our long-lived assets include, but are not limited to: a significant adverse change in the extent or manner in which the asset is being used or in its physical condition; a change in management’s intention or strategy for the asset, including a plan to dispose of the asset or idle the asset for a significant period of time; a significant adverse change in our long-term price assumption or in the price or availability of inputs required for manufacturing; a significant adverse change in legal factors or in the business climate that could affect the asset’s value; and a current period operating or cash flow loss combined with a history of operating or cash flow losses, or a projection or forecast that demonstrates continuing losses associated with the asset’s use.

When a triggering event is identified, recoverability of long-lived assets is assessed by comparing the carrying value of an asset or cash-generating unit to its estimated recoverable amount, which is the higher of its estimated fair value less costs of disposal and its value in use.

We determined the value in use of assets and cash-generating units using discounted cash flow models. Key assumptions used in estimating recoverable amount were based on industry sources as well as management estimates. Key assumptions included production volume, product pricing, raw material input cost, production cost, and discount rate.

An impairment write-down is recorded if the carrying value exceeds the estimated recoverable amount.

We recorded $51 million of impairment charges during the year ended December 31, 2022 relating to our Hinton, Alberta pulp mill (Pulp & Paper segment), Perry, Florida lumber mill (Lumber segment), and South Molton, England mill (Europe Engineered Wood Products segment). No impairments were recorded for 2021. The assessment of impairment indicators requires the exercise of judgment given the necessity of making key economic and operating assumptions about the future. If the future were to differ adversely from our best estimate and associated cash flows were to materially decrease, we could potentially experience future impairment charges in respect of our capital assets.

Defined Benefit Pension Plan Assumptions

We maintain defined benefit pension plans for many of our employees. We use independent actuarial specialists to perform actuarial valuations of our defined benefit pension plans.

Key assumptions used in determining defined benefit pension expense and accrued benefit obligations included assumed rates of increase for employee compensation and discount rate. Note 13 to the Annual Financial Statements provides the sensitivity of our accrued benefit obligations to changes in these key assumptions.

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If the future were to adversely differ from our best estimate of assumptions used in determining our accrued benefit obligations, we could experience future increased defined benefit pension expense, financing costs and charges to other comprehensive earnings.

CVD and ADD DutyRates

On November 25, 2016, a coalition of U.S. lumber producers petitioned the USDOC and the USITC to investigate alleged subsidies to Canadian softwood lumber producers and levy CVD and ADD against Canadian softwood lumber imports. The USDOC chose us as a “mandatory respondent” to both the countervailing and antidumping investigations, and as a result, we have received unique company-specific rates. Details can be found under the section “Discussion & Analysis of Annual Results by Product Segment - Lumber - Softwood Lumber Dispute.”

The CVD and ADD rates are subject to adjustment by the USDOC through an AR of POI. The CVD and ADD rates apply retroactively for each POI. We record CVD as export duty expense at the cash deposit rate until an AR finalizes a new applicable rate for each POI. We record ADD as export duty expense by estimating the rate to be applied for each POI by using our actual results and a similar calculation methodology as the USDOC and adjust when an AR finalizes a new applicable rate for each POI. The difference between the cumulative cash deposits paid and cumulative export duty expense recognized for each POI is recorded on our balance sheet as export duty deposits receivable or payable.

The softwood lumber case will continue to be subject to NAFTA or the new CUSMA and WTO dispute resolution processes and litigation in the U.S. In the past, long periods of litigation have led to negotiated settlements and duty deposit refunds.

In the interim, duties remain subject to the USDOC AR process, which results in an annual adjustment of duty deposit rates. Notwithstanding the deposit rates assigned under the investigations, our final liability for CVD and ADD will not be determined until each annual administrative review process is complete and related appeal processes are concluded.

If the future were to adversely differ from our best estimate of the duty deposit rate, we could experience material adjustments to duty expense and such adjustments could result in an increase of cash outflows.

Reforestation and Decommissioning Obligations

We recognize provisions for various statutory, contractual or legal obligations. In Canada, provincial regulations require timber quota holders to carry out reforestation to ensure re-establishment of the forest after harvesting. Reforested areas must be tended for a period sufficient to ensure that they are well established. The time needed to meet regulatory requirements depends on a variety of factors.

In our operating areas, the time to meet reforestation standards usually spans 12 to 15 years from the time of harvest. We record a liability for the estimated cost of the future reforestation activities when the harvesting takes place, discounted at an appropriate rate. The liability is accreted over time through charges to finance expense and reduced by silviculture expenditures.

We record the best estimate of the expenditure to be incurred to settle decommissioning obligations, such as landfill closures. This liability is determined using estimated closure and/or remediation costs discounted using an appropriate discount rate. On initial recognition, the carrying value of the liability is added to the carrying amount of the associated asset and amortized over its useful life or expensed when there is no related asset. The liability is accreted over time through charges to finance expense and reduced by actual costs of settlement.

Key assumptions underlying the reforestation and decommissioning obligations included the timing and the amount of forecasted expenditures and discount rate.

Material changes in financial position can arise as the actual costs incurred at the time of silviculture activities or decommissioning may differ from the estimates used in determining the liability. If the provisions for the reforestation and decommissioning obligations were to be inadequate, we could experience an increase to expenses in the future. A charge for an inadequate reforestation and decommissioning obligation provision would result in an increase of cash outflows proximate to the time that the obligation is satisfied.

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Accounting Policy Developments

Note 2 to the Annual Financial Statements contains a description of current and future changes in accounting policies, including: (1) initial application of standards, interpretations and amendments to standards and interpretations in the reporting period and (2) standards, interpretations and amendments to standards and interpretations issued but not yet effective.

RISKS AND UNCERTAINTIES

Our business is subject to a number of risks and uncertainties that can significantly affect our operations, financial condition and future performance. We have a comprehensive process to identify, manage, and mitigate risk, wherever possible. The risks and uncertainties described below are not necessarily the only risks we face. Additional risks and uncertainties that are presently unknown to us or deemed immaterial by us may adversely affect our business.

Product Demand and Price Fluctuations

Our revenues and financial results are primarily dependent on the demand for, and selling prices of, our products, which are subject to significant fluctuations. The demand and prices for lumber, plywood, OSB, particleboard, MDF, LVL, pulp, newsprint, wood chips and other wood products are highly volatile and are affected by factors such as:

·	global economic conditions including the strength of the U.S., Canadian, Chinese, Japanese, European and other international economies, particularly U.S. and Canadian housing markets and their mix of single and<br>multifamily construction, repair, renovation and remodelling spending and industrial application;
·	alternative products to lumber or panels;
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·	construction and home building disruptor technologies that may reduce the use of lumber or panels;
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·	changes in industry production capacity;
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·	changes in global inventory levels;
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·	increased competition from other consumers of logs and producers of lumber or panels;
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·	regulatory regimes setting a price on carbon that would increase the price of energy or fuel affecting the manufacturing cost of our products;
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·	elevated and continued rising of, interest rates, ongoing geo-political developments, including disruptions to the global economy resulting from the conflict in the Ukraine;
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·	inflationary pressures, including increases in energy prices; and
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·	other factors beyond our control.
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In addition, unemployment levels, interest rates, the availability of mortgage credit and the rate of mortgage foreclosures have a significant effect on residential construction and renovation activity, which in turn influences the demand for, and price of, building materials such as lumber and panel products. Declines in demand, and corresponding reductions in prices, for our products may adversely affect our financial condition and results of operations.

Our business is highly exposed to fluctuations in demand for and pricing of our wood products. Our sensitivity to commodity product pricing may result in a high degree of sales and earnings volatility. In the past, we have been negatively affected by declines in product pricing and have taken production downtime or indefinite curtailments to manage working capital and minimize cash losses. Severe and prolonged weakness in the markets for our wood products could seriously harm our financial position, operating results and cash flows.

We cannot predict with any reasonable accuracy future market conditions, demand or pricing for any of our products due to factors outside our control. Prolonged or severe weakness in the market for any of our principal products would adversely affect our financial condition. Future demand could also be impacted by the perceived sustainability of our wood products in contrast with competing alternatives.

Competition

We compete with global producers, some of which may have greater financial resources and lower production costs than we do. Currency devaluations can have the effect of reducing our competitors’ costs and making our products less competitive in certain markets. In addition, European lumber producers and South American panel producers may enter the North American market during periods of peak prices. Markets for our products are highly competitive. Our ability to maintain or improve the cost of producing and delivering products to those markets is crucial. Factors such as cost and

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availability of raw materials, energy and labour, the ability to maintain high operating rates and low per unit manufacturing costs, and the quality of our final products and our customer service all affect our earnings. Some of our products are also particularly sensitive to other factors including innovation, quality and service, with varying emphasis on these factors depending on the product. To the extent that one or more of our competitors become more successful with respect to any key competitive factor, our ability to attract and retain customers could be materially adversely affected. If we are unable to compete effectively, such failure could have a material adverse effect on our business, financial condition and results of operations.

Our products may compete with non-fibre based alternatives or with alternative products in certain market segments. For example, steel, engineered wood products, plastic, wood/plastic or composite materials may be used by builders as alternatives to the products produced by our wood products businesses such as lumber, plywood, OSB, LVL, particleboard and MDF products. Changes in prices for oil, chemicals and wood-based fibre can change the competitive position of our products relative to available alternatives and could increase substitution of those products for our products. In addition, our customers or potential customers may factor in environmental and sustainability factors in assessing whether to purchase our wood products. As the use of these alternatives grows, demand for our products may further decline.

Because commodity products have few distinguishing properties from producer to producer, competition for these products is based primarily on price, which is determined by supply relative to demand and competition from substitute products. Prices for our products are affected by many factors outside of our control, and we have no influence over the timing and extent of price changes, which often are volatile. Accordingly, our revenues may be negatively affected by pricing decisions made by our competitors and by decisions of our customers to purchase products from our competitors.

In addition, continued consolidation in the retail and construction industries could expose us to increased concentration of customer dependence and increase customers’ ability to exert pricing pressure on us and our products. In addition, concentration of our business with fewer customers as a result of consolidation could expose us to risks associated with the loss of key customers. For example, the loss of a significant customer, any significant customer order cancellations or bad debts could negatively affect our sales and earnings.

Availability of Fibre

Canada

A significant majority of our Canadian log requirements are harvested from lands owned by a provincial government. Provincial governments control the volumes that can be harvested under provincially-granted tenures and otherwise regulate the availability of Crown timber for harvest. Determinations by provincial governments to (i) reduce the volume of timber, to issue or not issue operating permits to harvest timber; (ii) to limit the areas that may be harvested under timber tenures; (iii) to restrict the transfer or acquisition of timber tenures; (iv) to regulate the processing of timber or use of harvesting contractors, including to protect the environment or endangered species, species at risk and critical habitat or as a result of forest fires, mountain pine beetle infestations, harvest and caribou conservation plans; (v) in response to jurisprudence or government policies respecting Indigenous rights and title or reconciliation efforts, land use management and planning processes, including those agreements between the B.C. provincial government and the Blueberry River First Nations or potential reallocation of harvesting rights to Indigenous Nations or communities; or (vi) to restrict log processing to local or appurtenant sawmills or to mandate amounts of work to be provided or rates to be paid to harvesting contractors; or (vii) change the methodology or rates for stumpage, may reduce our ability to secure log or residual fibre supply, may increase our log purchase and residual fibre costs, may adversely impact lumber grade and recovery and may impact our operations, including require us to reduce operating rates.

In addition, our timber supply in B.C. may also be negatively impacted by the announced intention of the Government of B.C. to defer logging in 2.6 million hectares of forests described as “old growth” forests. While the scope of the actions to be taken by the Government of B.C. under these amended forestry statutes and “old growth” deferral proposals cannot be determined at this time, these actions could have a material impact on both the amount of our AAC forest tenures and the amount of timber that we are able to harvest from these tenures.

We rely on third party independent contractors to harvest timber in areas over which we hold timber tenures. Increases in rates charged by these independent contractors or the limited availability of these independent contractors or new regulations on the work to be provided and rates to be paid to these contractors may increase our timber harvesting costs.

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We also rely on the purchase of logs through open market purchases and private supply agreements and log exchange agreements and increased competition for logs, or shortages of logs may result in increases in our log purchase costs.

United States

We rely on log supply agreements in the U.S. which are subject to log availability and based on market prices. The majority of the aggregate log requirements for our U.S. mills is purchased on the open market. Open market purchases come from timber real estate investment trusts, timberland investment management organizations and private land owners. Changes in the log markets in which we operate may reduce the supply of logs available to us and may increase the costs of log purchases, each of which could adversely affect our results. In addition, changes in the market for residuals may reduce the demand and selling price for the residuals produced by our operations and increase the disposal costs, which could adversely affect our results. We may experience higher competition for sustainable log supply sourcing as supply is limited by alternative demand for forests in carbon sequestration and through the increase in conversion to forest plantations or non-forest use where there is significant regional forest area decline.

Europe

Wood fibre for our European OSB, particleboard and MDF operations is purchased from government and private landowners. Changes in the log markets in which we operate may reduce the supply of logs available to us and may increase the costs of log purchases, each of which could adversely affect our results.

Additional Risks to Availability of Fibre

When timber, wood chips, other residual fibre and wood recycled materials are purchased on the open market, we are in competition with other uses of such resources, where prices and the availability of supply are influenced by factors beyond our control. Fibre supply can also be influenced by natural events, such as forest fires, severe weather conditions, insect epidemics and other natural disasters, which may increase wood fibre costs, restrict access to wood fibre or force production curtailments.

Transportation Requirements

Our business depends on our ability to transport a high volume of products and raw materials to and from our production facilities and onto both domestic and international markets. We rely primarily on third-party transportation providers for both the delivery of raw materials to our production facilities and the transportation of our products to market. These third-party transportation providers include truckers, bulk and container shippers and railways. Our ability to obtain transportation services from these transportation service providers is subject to risks which include, without limitation, availability of equipment and operators, disruptions due to weather, natural disasters and labour disputes. To the extent that climate change results in more frequent severe weather occurrences, we may experience increased frequency of transportation disruptions in future years which may again result in a disruption of our ability to ship lumber and other products that we manufacture, including significant transportation disruptions from severe flooding, hurricanes, and other natural disasters. In addition, the potential of increased frequency of severe weather events may ultimately result in increased transportation costs as transportation providers, including railways, undertake capital expenditures to improve the ability of the transportation infrastructure to withstand severe weather events or to repair damage from severe weather events in order to maintain services.

Transportation services may also be impacted by seasonal factors, which could impact the timely delivery of raw materials and distribution of products to customers. As a result of rail and truck capacity constraints, access to adequate transportation capacity has at times been strained and could affect our ability to transport our products to markets and could result in increased product inventories. Any failure of third-party transportation providers to deliver finished goods or raw materials in a timely manner, including failure caused by adverse weather conditions or work stoppages, could harm our reputation, negatively affect customer relationships or disrupt production at our mills. Transportation costs are also subject to risks that include, without limitation, increased rates due to competition, increased fuel costs and increased capital expenditures related to repair, maintenance and upgrading of transportation infrastructure. Increases in transportation costs will increase our operating costs and adversely impact our profitability. If we are unable to obtain transportation services or if our transportation costs increase, our revenues may decrease due to our inability to deliver products to market and our operating expenses may increase, each of which would adversely affect our results of operations.

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Costs and Availability of Materials and Energy

We rely heavily on certain raw materials, including logs, wood chips and other fibre sources, chemicals, and energy sources, including natural gas and electricity, in our manufacturing processes. Competition from our industry and other industries, as well as supply disruptions may result in increased demand and costs for these raw materials and energy sources. We have experienced significant cost inflation across a number of our inputs including supplies and materials and energy. Increases in the costs of these raw materials and energy sources will increase our operating costs and will reduce our operating margins. There is no assurance that we will be able to fully offset the effects of higher raw material or energy costs through hedging arrangements, price increases, productivity improvements or cost-reduction programs.

Our operations depend on an uninterrupted supply of resins and chemicals, production inputs, and other supplies and resources such as skilled personnel. Supply may be interrupted due to a shortage or the scarce nature of inputs, especially with regard to chemicals. Supply might also be interrupted due to transportation and logistics associated with the remote location of some of our operations, and government restrictions or regulations which delay importation of necessary items. COVID-19 has had a significant impact on global supply chains, which has impacted our ability to source supplies required for our operations and has increased the costs of those supplies. Any interruptions to the procurement and supply of resins, chemicals, production inputs and other supplies, or the availability of skilled personnel, as well as increasing rates of inflation, could have an adverse impact on our future cash flows, earnings, results of operations, and financial condition.

Operational Curtailments

From time to time, we suspend or curtail operations at one or more of our facilities in response to market conditions, environmental risks, or other operational issues, including, but not limited to scheduled and unscheduled maintenance, temporary periods of high electricity prices, power failures, equipment breakdowns, adverse weather conditions, labour disruptions, transportation disruptions, unavailability of staff, fire hazards, and the availability or cost of raw materials including logs, wood chips, resins and chemicals. In addition, the potential increased frequency of extreme weather events associated with climate change may result in operational curtailments becoming more frequent than we have experienced historically.

In addition, our ability to operate at full capacity may be affected by ongoing capital projects. As a result, our facilities may from time to time operate at less than full capacity. These operational suspensions could have a material adverse effect on our financial condition as a result of decreased revenues and lower operating margins.

In Canada, a substantial portion of the wood chip requirements of our Canadian pulp and paper operations are provided by our Canadian sawmills and plywood and LVL plants. If wood chip production is reduced because of production curtailments, improved manufacturing efficiencies or any other reason, our pulp and paper operations may incur additional costs to acquire or produce additional wood chips or be forced to reduce production. Conversely, pulp and paper mill production curtailments may require our sawmills and panel mills to find other ways to dispose of residual wood fibre and may result in curtailment or suspension of lumber, plywood or LVL production and increased costs.

Labour and Services

Our operations rely on experienced local and regional management and both skilled and unskilled workers as well as third party services such as logging and transportation and services for our capital projects. Because our operations are generally located away from major urban centers, we often face strong competition from our industry and others such as oil and gas production, mining and manufacturing for labour and services, particularly skilled trades. Shortages of key services or shortages of management leaders or skilled or unskilled workers, including those caused by a failure to attract and retain a sufficient number of qualified employees and other personnel or high employee turnover could impair our operations by reducing production or increasing costs or impacting the ability to execute on our capital projects including timing and costs.

We employ a unionized workforce in a number of our operations. Walkouts or strikes by employees could result in lost production and sales, higher costs, supply constraints and litigation that could have a material adverse effect on our business. In addition, disputes with the unions that represent our employees may lead to litigation, the result of which may adversely impact cash flow and profitability of certain of our operations. Also, we depend on a variety of third parties that employ unionized workers to provide critical services to us. Labour disputes experienced by these third parties could lead to disruptions at our facilities.

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Approximately 34% of our employees are covered by collective agreements. There were no expired collective agreements remaining as at December 31, 2022, other than the collective agreement with respect to our Barwick OSB operations in Ontario, Canada. All of our U.K. and Belgian union contracts are evergreen. Union agreements representing approximately 36% and 12% of our unionized employees expire in 2023 and 2024, respectively. In the event that we are unable to renew these collective agreements upon their expiry or the Barwick collective agreement in the near term, we could experience strikes or labour stoppages at the impacted facilities which could result in lost production and sales, higher costs and/or supply constraints.

Trade Restrictions

A substantial portion of our products that are manufactured in Canada are exported for sale. Our financial results are dependent on continued access to the export markets and tariffs, quotas and other trade barriers that restrict or prevent access represent a continuing risk to us. Canadian softwood lumber exports to the U.S. have been the subject of trade disputes and managed trade arrangements for the last several decades. During the period from October 2006 through October 2015 these exports were subject to a trade agreement between the U.S. and Canada and on the expiry of that agreement, a one-year moratorium on trade sanctions by the U.S. came into place. That moratorium has expired and in November 2016 a group of U.S. lumber producers petitioned the USDOC and the USITC to impose trade sanctions against Canadian softwood lumber exports to the U.S. In 2017 duties were imposed on Canadian softwood lumber exports to the U.S. The current duties are likely to remain in place until and unless some form of trade agreement can be reached between the U.S. and Canada (which trade agreement could include other tariffs or duties or quotas that restrict lumber exports) or a final, binding determination is made as a result of litigation. Unless the additional costs imposed by duties can be passed along to lumber consumers, the duties will increase costs for Canadian producers and, in certain cases, could result in some Canadian production becoming unprofitable. Whether and to what extent duties can be passed along to consumers will largely depend on the strength of demand for softwood lumber, which is significantly influenced by the levels of new residential construction in the U.S. If duties can be passed through to consumers in whole or in part the price of Canadian softwood lumber will increase (although the increase will not necessarily be for the benefit of Canadian producers) which in turn could cause the price of SYP lumber, which would not be subject to the duty, to increase as well.

While the USDOC has issued its final duty rates for 2017 through 2020, the duty rates for the 2021 POI has not been finalized, and there is no assurance that the final rates for antidumping duty and countervailing duty will not differ materially from the cash deposit rates in place for those years.

The application of U.S. trade laws could, in certain circumstances, create significant burdens on us. We are a mandatory respondent in current investigations being conducted by the USDOC into alleged subsidies and dumping of Canadian softwood lumber. In addition, the current trade dispute between the U.S. and China could negatively impact either or both the U.S. and Chinese economies which could have an adverse effect on the demand for our products and could adversely affect our financial results. Further, the current diplomatic and trade issues between Canada and China could result in tariffs and other trade barriers that restrict access to the market in China for our products.

The future performance of our business is dependent upon international trade and, in particular, cross border trade between Canada and the U.S. and between the U.K. and European Union. Access to markets in the U.S., the European Union, China and other countries may be affected from time to time by various trade-related events. The financial condition and results of operations of our business could be materially adversely affected by trade rulings, the failure to reach or adopt trade agreements, the imposition of customs duties or other tariffs, or an increase in trade restrictions in the future.

Environment

We are subject to regulation by federal, provincial, state, municipal and local environmental authorities, including, among other matters, environmental regulations relating to air emissions and pollutants, wastewater (effluent) discharges, solid and hazardous waste, landfill operations, forestry practices, permitting obligations, site remediation and the protection of threatened or endangered species and critical habitat. Concerns over climate change, carbon emissions, water and land-use practices and the protection of threatened or endangered species and critical habitat could also lead governments to enact additional or more stringent environmental laws and regulations that may require us to incur significant capital expenditures, pay higher taxes or fees, including carbon related taxes or otherwise could adversely affect our operations or financial conditions.

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We have incurred, and will continue to incur, capital expenditures and operating costs to comply with environmental laws and regulations, including the U.S. Environmental Protection Agency’s Boiler MACT (maximum achievable control technology) regulations. These regulations include environmental laws and regulations relating to air emissions, wastewater discharges, solid and hazardous waste management, plant and wildlife protection and site remediation, as well as workplace safety. In addition, changes in the regulatory environment respecting climate change have and may lead governments and regulatory bodies to enact additional or more stringent laws and regulations and impose operational restrictions or incremental levies and taxes applicable to our Company which could require us to incur increased capital expenditures or result in increased operating expenses. In addition, we anticipate incurring additional capital expenditures in connection with capital projects that we plan to undertake in order to achieve our targeted greenhouse gas emission objectives. These capital expenditures may be greater than initially projected, and changes in environmental laws could impose more stringent requirements than our targeted objectives and result in increased capital expenditures or acceleration of the time for completion of the capital projects.

No assurance can be given that changes in these laws and regulations or their application will not have a material adverse effect on our business, operations, financial condition and operational results. Similarly, no assurance can be given that capital expenditures necessary for future compliance with existing and new environmental laws and regulations could be financed from our available cash flow. Failure to comply with applicable laws and regulations could result in fines, penalties or other enforcement actions that could impact our production capacity or increase our production costs. In addition, laws and regulations could become more stringent or subject to different interpretation in the future.

We may discover currently unknown environmental problems, contamination, or conditions relating to our past or present operations. This or any failure to comply with environmental laws and regulations may require site or other remediation costs or result in governmental or private claims for damage to person, property, natural resources or the environmental or governmental sanctions, including fines or the curtailment or suspension of our operations, which could have a material adverse effect on our business, financial condition and operational results.

We are currently involved in investigation and remediation activities and maintain accruals for certain environmental matters or obligations, as set out in the notes to the Annual Financial Statements. Changing weather patterns and climatic conditions due to natural and man-made causes, including temperature shifts and changes to seasonal norms for winter and summer, can adversely impact our ability to meet our reforestation obligations and the expected cost to settle these liabilities. There can be no assurance that any costs associated with such obligations or other environmental matters will not exceed our accruals.

Our Canadian woodland operations, and the harvesting operations of our many key U.S. log and European wood fibre suppliers, in addition to being subject to various environmental protection laws, are subject to third-party certification as to compliance with internationally recognized, sustainable forest management standards. Demand for our products may be reduced if we are unable to achieve compliance or are perceived by the public as failing to comply, with these applicable environmental protection laws and sustainable forest management standards, or if our customers require compliance with alternate forest management standards for which our operations are not certified. In addition, changes in sustainable forest management standards or our determination to seek certification for compliance with alternate sustainable forest management standards may increase our costs of wood fibre and operations.

Climate Change, Environmental and Social Risks

We face direct risks associated with climate change and the environment, as well as indirect risks resulting from the growing international concern regarding climate change, environmental and social matters. Specifically, there has been a significant increase in focus on the timing and ability of organizations to transition to a lower-carbon economy and to demonstrate a commitment to environmental, social and governance issues. Governments, financial institutions, insurance companies, environmental and governance organizations, institutional investors, social and environmental activists, and individuals are increasingly seeking to implement, among other things, regulatory developments, policy changes and investment patterns, which, individually and collectively may have financial implications for both us and our stakeholders (i.e., customers, suppliers, shareholders).

Our business operations face risks associated with climate change and the environment, as identified and discussed in this Risk and Uncertainties section of this MD&A. In addition, climate change and its associated impacts may increase our exposure to, and magnitude of, other risks identified in this Risk and Uncertainties section of this MD&A.

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Overall, we are not able to estimate at this time the degree to which climate change related regulatory, climatic conditions, and climate-related transition risks could impact our financial and operating results. Our business, financial condition, results of operations, cash flows, reputation, access to capital, access to insurance, cost of borrowing, access to liquidity, ability to fund dividend payments and/or business plans may, in particular, without limitation, be adversely impacted as a result of climate change and its associated impacts. We have initiated a formal climate change scenario analysis, informed by the Task Force on Climate-related Disclosures (TCFD) recommendations, to understand the potential impacts of climate-related risks and opportunities using different scenarios to help enhance our corporate strategy, supply planning and risk management and create awareness with our stakeholders, and build business resiliency.

We also face potential strategic, reputational, business, legal and regulatory risks relating to our actual or perceived actions, or inaction, in relation to climate change and other environmental and social risk issues, progress against our environmental or social commitments, or our disclosures on these matters. Investors and stakeholders increasingly compare companies based on climate-related performance and a perception among financial institutions and investors that our ESG initiatives, including the forestry industry’s sustainability initiatives, are insufficient, could adversely affect our reputation and ability to attract investors and capital.

In 2022, we joined the Science-Based Targets Initiative, which included setting specific science-based targets to achieve GHG emissions reduction across all our operations by 2030, as part of our overall sustainability and ESG initiatives. There is a risk that we will not meet our GHG emissions reduction targets, that some or all of the expected benefits and opportunities of achieving our various GHG and sustainability targets may fail to materialize, and that achieving the targets may cost more to achieve than projected or may not occur within anticipated time periods. Our failure to achieve our GHG or our sustainability targets, or a perception by key stakeholders, including our customers and our investors, that our GHG targets or other ESG initiatives are insufficient, could adversely affect our reputation and our ability to attract investors, capital and insurance coverage. Further, actions taken by us to meet our GHG targets and achieve our sustainability objectives may ultimately increase our projected capital expenditures and our costs of operations. In addition, our ability to access capital or the costs of available capital may be adversely affected in the event that financial institutions, investors, rating agencies and/or lenders adopt more restrictive sustainability policies than we have committed to.

Indigenous Groups

Issues relating to Indigenous groups, including Indigenous Nations, Métis and others, have the potential for an impact on resource companies operating in Canada including West Fraser. Risks include potential delays or effects of governmental decisions relating to Canadian Crown timber harvesting rights (including their grant, renewal or transfer or authorization to harvest) in light of the government’s duty to consult and accommodate Indigenous groups in respect of Aboriginal rights or treaty rights, agreements governments may choose to enter into with Indigenous groups or steps governments may take in favour of Indigenous groups even if not required by law, related terms and conditions of authorizations and potential findings of Aboriginal title over land.

We participate, as requested by the government, in the consultation process in support of the government fulfilling its duty to consult. We also seek to develop and maintain good relationships and, where possible, agreements with Aboriginal groups that may be affected by our business activities. However, as the jurisprudence and government policies respecting Indigenous rights and title and the consultation process continue to evolve, as treaty and non-treaty negotiations continue, and as governments continue to announce and implement further policy and legislative changes to Indigenous interests (including, but not limited to the British Columbia Declaration of the Rights of Indigenous Peoples Act) and the federal United Nations Declaration on the Rights of Indigenous Peoples Act, we cannot assure that **** Indigenous claims will not in the future have a material adverse effect on our timber harvesting rights or our ability to exercise or renew them or secure other timber harvesting rights.

In addition, if the Government of British Columbia implements its plan to defer logging in “old growth” forest areas, our ability to secure timber supply from affected areas may be impacted by our ability to foster and maintain good relations with Indigenous Nations in the impacted areas, and their willingness to approve or consent to logging of portions of our forest licences that are considered “old growth” forests. The unwillingness of Indigenous Nations to approve or consent to logging in areas impacted by the deferral could reduce the amount of timber supply available to us.

Further, the Government of British Columbia recently reached agreement with the Blueberry First Nations which commits the province to a pathway to restoring the land through new co-management processes, funding and a variety of

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protection measures, including protecting new areas, significantly reducing harvest areas and developing a new land use planning process. The land use planning process is expected to reduce the availability of and increase the timeline for, receipt of cutting permits and restrict volume available for harvest.

Contagious Disease

Pandemics, epidemics and other outbreaks of contagious diseases, including COVID-19 and future COVID-19 variants, could cause interruptions to our business and operations and otherwise have an adverse effect on our business, financial condition and/or results of operations including as a result of the effects on: (i) global economic activity, (ii) the business, operations, financial condition, and solvency of our customers caused by operating shutdowns or disruptions or financial or liquidity issues, (iii) the demand for and price of our products, (iv) the health of our employees and the impact on their ability to work or travel, (v) our ability to operate our manufacturing facilities, (vi) our supply chain and the ability of third party suppliers, service providers and/or transportation carriers to supply goods or services on which we rely on to transport our products to market, and (vii) our revenues, cash flow, liquidity and ability to maintain compliance with the covenants in our credit agreements. In addition, our future business may be impacted by the local, regional, national or international outbreak or escalation of other contagious diseases, viruses or other illnesses, including the resurgence of COVID-19 and any future variants, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, H1N1 influenza virus, avian flu or any other similar illness, or fear of the foregoing,

Demand and prices for our products may be adversely affected by contagious diseases that affect levels of economic activity, and we are unable to predict or estimate the timing or extent of the impact of such pandemics, epidemics, and other outbreaks. Governmental measures or restrictions, including those requiring the closures of businesses, restrictions on travel, country, provincial or state and city-wide isolation orders, and physical distancing requirements, may directly affect our operations and employees and those of our customers, suppliers and service providers, and the demand for and pricing of our products. The spread of such contagious diseases among our employees or those of our suppliers or service providers could result in lower production and sales, higher costs, and supply and transportation constraints. Accordingly, our production, costs, and sales may be negatively affected, which could have a material adverse effect on our business, financial condition and/or results of operation.

Given the ongoing nature of the COVID-19 outbreak, it is challenging to predict the impact on the Company’s business. The extent of such impact will depend on future developments, which are uncertain, including the resurgence of COVID-19 and any variants, new information that may emerge concerning the spread and severity, and actions taken to address its impact, among others. It is difficult to predict how this virus may affect our business in the future, including its effect (positive or negative; long or short term) on the demand and price for our products. It is possible that the resurgence of COVID-19, including any future variants, particularly if it has a prolonged duration, could have a material adverse effect on our supply chain, market pricing and customer demand, and distribution networks and may result in our inability to fully staff our manufacturing facilities, with the result that we may be forced to temporarily close facilities or reduce production rates during periods. These factors may further impact our operating plans, business, financial condition, liquidity, the valuation of long-lived assets, and operating results.

Regulatory

Our operations are subject to extensive general and industry-specific federal, provincial, state, municipal and other local laws and regulations and other requirements, including those governing forestry, exports, taxes (including, but not limited to, income, sales and carbon taxes), employees, labour standards, occupational health and safety, waste disposal, environmental protection and remediation, protection of endangered and protected species and land use and expropriation. We are required to obtain approvals, permits and licences for our operations, which may require advance consultation with potentially affected stakeholders including Indigenous groups and impose conditions that must be complied with. If we are unable to obtain, maintain, extend or renew, or are delayed in extending or renewing, a material approval, permit or license, our operations or financial condition could be adversely affected. There is no assurance that these laws, regulations or government requirements, or the administrative interpretation or enforcement of existing laws and regulations, will not change in the future in a manner that may require us to incur significant capital expenditures, pay higher taxes or otherwise could adversely affect our operations or financial condition. Failure to comply with applicable laws or regulations, including approvals, permits and licences, could result in fines, penalties or enforcement actions, including orders suspending or curtailing our operations or requiring corrective measures or remedial actions.

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Natural and Man-Made Disasters and Climate Change Adaptation

Our operations are subject to adverse natural or man-made events such as forest fires, flooding, hurricanes and other severe weather conditions, climate change, timber diseases and insect infestations including those that may be associated with warmer climate conditions, and earthquake activity. Over the past several years, changing weather patterns and climatic conditions due to natural and man-made causes, including temperature shifts and changes to seasonal norms for winter and summer, have added to the unpredictability and frequency of natural events such as severe weather, hurricanes, flooding, hailstorms, wildfires, mudslides, road washouts, snow, ice storms, and the spread of disease and insect infestations. Trends towards heavier precipitation patterns, changes to water quality and water storage on the land base can result in the overall degradation of water quality and reduced water supply levels. These events could damage or destroy or adversely affect the operations at our physical facilities or the cost, availability, and quality of our timber supply, and similar events could also affect the facilities of our suppliers or customers. Any such damage or destruction could adversely affect our financial results as a result of the reduced availability of timber, decreased production output, increased operating costs or the reduced availability of transportation. Although we believe we have reasonable insurance arrangements in place to cover certain of such incidents related to damage or destruction, there can be no assurance that these arrangements will be sufficient to fully protect us against such losses. As is common in the industry, we do not insure loss of standing timber for any cause.

In addition, government action to address climate change, carbon emissions, water and land use and the protection of threatened or endangered species and critical habitat may result in the enactment of additional or more stringent laws and regulations that may require us to incur significant capital expenditures, pay higher taxes or fees, including carbon related taxes, or otherwise could adversely affect our operations or financial conditions.

Information Technology and Cyber Security

We are reliant on our information and operations technology systems to operate our manufacturing facilities, access fibre, communicate internally and with suppliers and customers, to sell our products and to process payments and payroll as well as for other corporate purposes and financial reporting. An interruption or failure or unsuccessful implementation and integration of our information and operations technology systems could result in a material adverse effect on our operations, business, financial condition and results of operations.

In order to optimize performance, we regularly implement business process improvement initiatives and invest capital to upgrade our information technology infrastructure. These initiatives may involve risks to the operations and we may experience difficulties during the transition to these new or upgraded systems and processes. Difficulties in implementing new or upgraded information systems or significant system failures could disrupt operations and have a material adverse effect on the business.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, proprietary business and confidential financial information and identifiable personal information of our employees. We rely on industry accepted security measures and technology to protect our information systems and confidential and proprietary information.

However, our information and operations technology systems, including process control systems, are still subject to cyber security risks and are vulnerable to natural disasters, fires, power outages, vandalism, attacks by hackers or others or breaches due to employee error or other disruptions. Any such attack on or breach of our systems including through exposure to potential computer viruses or malware could compromise our systems and stored information may be accessed, publicly disclosed, lost or compromised, which could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruptions to our operations, decreased performance and production, increased costs, and damage to our reputation, which could have a material adverse effect on our business, financial condition and results of operations. As cyber security threats continue to evolve, we may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities. However, our exposure to these risks cannot be fully mitigated due to the nature of these threats. Further, disruptions resulting from cyber security breaches could expose us to potential liability or other proceedings by affected individuals, business partners and/or regulators. As a result, we could face increased costs if any future claims exceed our insurance coverage.

In addition to risks we face from cyber security incidents directed at our systems, we also face risks from cyber security incidents impacting third parties, including but not limited to contractors, consultants and suppliers, directly or indirectly

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involved in our business and operations. We are vulnerable to damage and interruptions from incidents involving these third parties, and may be exposed to consequences that could have a material adverse effect on our financial condition, operations, production, sales and business.

Legal Proceedings

The Company is subject to various investigations, claims and legal, regulatory and tax proceedings covering a wide range of matters that arise in the ordinary course of business activities, including civil claims and lawsuits, regulatory examinations, investigations, audits and requests for information by various governmental regulatory agencies and law enforcement authorities in various jurisdictions. Each of these matters is subject to various uncertainties and it is possible that some of these matters may be resolved unfavourably. We establish provisions for matters that are probable and can be reasonably estimated in accordance with our accounting policies, however there is no assurance that our estimates will be accurate. We also carry liability insurance coverage, however such insurance does not cover all risks to which we might be exposed and in other cases, may only partially cover losses incurred by us. In addition, we may be involved in disputes with other parties in the future that may result in litigation, which may result in a material adverse effect on our financial position, cash flow and results of operations.

We produce a variety of wood-based panels that are used in new home construction, repair and remodelling of existing homes, furniture and fixtures, and industrial applications. In the normal course of business, the end users of our products have made, and could in the future make, claims with respect to the fitness for use of its products or claims related to product quality or performance issues.

In addition, we have been and may in the future be, involved in legal proceedings related to antitrust, negligence, personal injury, property damage, environmental matters, and labour and other claims against us or our predecessors.

Capital Intensity

Our business and the production of wood-based products is capital intensive. There can be no assurance that key manufacturing facilities and pieces of equipment will not need to be updated, modernized, repaired or replaced, or that operation of our manufacturing facilities could not otherwise be disrupted unexpectedly, for example by adverse weather, labour disputes, information technology disruptions, power outages, fire, explosion or other hazards including combustible wood dust. In certain circumstances, the costs of repairing or replacing equipment, and the associated downtime of the affected production line, may not be insurable.

We are required to review our long-lived assets for indicators that their carrying values are not recoverable. Indicators could include high raw material costs, high energy costs, changes in demand for our products, declines in product pricing, changes in technology, prolonged negative results or operational curtailments, and may result in non-cash impairment or accelerated depreciation charges in the future and therefore have a negative impact to earnings in the period when these charges are recorded.

Tax Exposures

In the normal course of business, we take various positions in the filing of our tax returns, and there can be no assurance that tax authorities will not challenge such filing positions. In addition, we are subject to further uncertainties concerning the interpretation and application of tax laws in various operating jurisdictions. We provide for known estimated tax exposures in all jurisdictions. These exposures are settled primarily through the closure of audits with the jurisdictional taxing authorities. However, future settlements could differ materially from our estimated liabilities.

Potential Future Changes in Tax Laws, including Tax Rates

Our corporate structure is based on prevailing taxation law, regulations and practice in the local jurisdictions in which we operate. We are aware that new taxation rules could be enacted or that existing rules could be applied in a manner that subjects our profits to additional taxation or otherwise has a material adverse effect on our profitability, results of operations, deferred tax assets and liabilities, financial condition or the trading price of our securities. Our management is continually monitoring changes in tax policy, tax legislation (including in relation to taxation rates), and the interpretation of tax policy or legislation or practice that could have such an effect. At any given time, we may face tax exposures arising out of changes in tax or transfer pricing laws, tax reassessments or otherwise. Governments around the world are increasingly seeking to regulate multinational companies and their use of differential tax rates between jurisdictions. This

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effort includes a greater emphasis by various nations to coordinate and share information regarding companies and the taxes they pay. Changes in governmental taxation policies and practices could adversely affect us or result in negative media coverage and, depending on the nature of such policies and practices, could have a greater impact on the Company than on other companies.

Foreign Currency Exchange Rates

Our Canadian operations sell the majority of their products at prices denominated in U.S. dollars or based on prevailing U.S. dollar prices while a significant portion of their operational costs and expenses are incurred in Canadian dollars. Upon closing of the Norbord Acquisition, we changed the functional currency and presentation currency of our Canadian operations, with the exception of our Canadian newsprint operation, from Canadian dollars to United States dollars. Our U.K. operations sell a portion of their products at prices denominated in Euros while the majority of their costs are incurred in British pounds sterling.

Accordingly, exchange rate fluctuations will result in exchange gains or losses recorded in earnings and other comprehensive earnings. This results in significant earnings sensitivity to changes in the relative value of the United States dollar in comparison to the value of the Canadian dollar, British pound sterling and Euro. These exchange rates are affected by a broad range of factors which makes future rates difficult to accurately predict. Significant fluctuations in relative currency values may also negatively affect the cost competitiveness of our facilities, the value of our foreign investments, the results of our operations and our financial position.

Long-Lived Assets andRecoverability of Goodwill

Our long-lived assets and goodwill could become impaired, which could have a material non-cash adverse effect on our results of operations. We review our operations for events and circumstances that could indicate that the carrying value of our long-lived assets and goodwill may not be recoverable. If indicators of impairment are determined to exist, we review the recoverability of the carrying value of long-lived assets by estimating the recoverable amount of the asset, which is the higher of its estimated fair value less costs of disposal and its value in use. We also review our goodwill for impairment annually and when events or changes in circumstances indicate that the carrying value of the CGU or group of CGUs associated with the goodwill balance is not recoverable. We determine the value in use of assets and cash-generating units using discounted cash flow models. Management makes multiple assumptions in estimating future cash flows. Key assumptions include production volume, product pricing, raw material input cost, production cost, trend multiple, and discount rate. There are numerous uncertainties inherent in making these estimates, including many factors beyond our control, that could cause actual results to differ materially from expected financial and operating results. We may be required to recognize material non-cash charges relating to impairments of long-lived assets and/or goodwill in the future if actual results differ materially from management’s estimates. If a goodwill impairment charge is incurred, such charges are not reversible at a later date even when the events and circumstances that caused the impairment loss are favourably resolved. As a result of these uncertainties and the significant amount of goodwill ($1,944 million at December 31, 2022), our operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment, and actual results may be less favourable than estimated returns and initial financial outlook. For additional information regarding goodwill, see Note 8 to the Annual Financial Statements. Further, our auditors have identified our goodwill impairment assessments as a “critical audit matter” in their report on their audit of the Annual Financial Statements.

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Capital Plans

Our capital plans will include, from time to time, expansion, productivity improvement, technology upgrades, operating efficiency optimization and maintenance, repair or replacement of our existing facilities and equipment. In addition, we will from time to time undertake the acquisition of facilities or the rebuilding or modernization of existing facilities, including the rebuilding and modernization of existing and newly acquired facilities. We may also in the future be required to undertake capital projects to (i) address or mitigate the impacts of climate change and extreme weather events at our facilities, (ii) comply with new government regulation directed at reducing the impacts of climate change; (iii) reduce the carbon intensity or footprint of our existing operations by reducing or eliminating fossil fuel usage, or (iv) comply with new government regulation directed at improving environmental protection. If the capital expenditures associated with these capital projects are greater than we have projected or if construction timelines are longer than anticipated, or if we fail to achieve the intended efficiencies, our financial condition, results of operations and cash flows

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may be adversely affected. In addition, our ability to expand production and improve operational efficiencies will be contingent on our ability to execute on our capital plans. Our capital plans and our ability to execute on such plans may be adversely affected by availability of, and competition for, qualified workers and contractors, machinery and equipment lead times, changes in government regulations, unexpected delays and increases in costs of completing capital projects including due to increased materials, machinery and equipment costs resulting from trade disputes and increased tariffs and duties.

Capital Resources

We believe our capital resources will be adequate to meet our current projected operating needs, capital expenditures and other cash requirements. Factors that could adversely affect our capital resources include prolonged and sustained declines in the demand and prices for our products, unanticipated significant increases in our operating expenses and unanticipated capital expenditures. If for any reason we are unable to provide for our operating needs, capital expenditures and other cash requirements on commercially reasonable terms, we could experience a material adverse effect to our business, financial condition, results of operations and cash flows.

Availability of Credit

We rely on long-term borrowings and access to revolving credit in order to finance our ongoing operations. Our ability to refinance or renew such facilities will be dependent upon our financial condition, profitability and credit ratings and prevailing financial market conditions. Any change in availability of credit in the market, as could happen during an economic downturn, could affect our ability to access credit markets on commercially reasonable terms. In the future we may need to access public or private debt markets to issue new debt. Deteriorations or volatility in the credit markets could also adversely affect:

·	our ability to secure financing to proceed with capital expenditures for the repair, replacement or expansion of our existing facilities and equipment;
·	our ability to comply with covenants under our existing credit or debt agreements;
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·	the ability of our customers to purchase our products; and
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·	our ability to take advantage of growth, expansion or acquisition opportunities.
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In addition, deteriorations or volatility in the credit market could result in increases in the interest rates that we pay on our outstanding non-fixed rate debt, which would increase our costs of borrowing and adversely affect our results.

We have notes maturing in 2024 and a term loan maturing in 2024. There is no assurance that financing will be available to us when required or available to us on commercially favourable or otherwise satisfactory terms in the future to re-finance these borrowings when they become due.

Credit Ratings

Credit rating agencies rate our debt securities based on factors that include our operating results, actions that we take, their view of the general outlook for our industry and their view of the general outlook for the economy. Actions taken by the rating agencies can include maintaining, upgrading or downgrading the current rating or placing us on a watch list for possible future downgrading. Downgrading the credit rating of our debt securities or placing us on a watch list for possible future downgrading could limit our access to the credit markets, increase our cost of financing and have an adverse effect on our financial condition.

Wood Dust

Our operations generate wood dust which has been recognized for many years as a potential health and safety hazard and operational issue. The potential risks associated with wood dust have been increased in those of our B.C. and Alberta facilities that have been processing mountain pine beetle-killed logs and fire damaged logs as the wood dust generated from these logs tends to be drier, lighter and finer than wood dust typically generated. We have adopted a variety of measures to reduce or eliminate the risks and operational challenges posed by the presence of wood dust in our facilities and we continue to work with industry and regulators to develop and adopt best mitigation practices. Any explosion or similar event at any of our facilities or any third-party facility could result in significant loss, increases in expenses and disruption of operations, each of which would have a material adverse effect on our business.

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Pension Plan Funding

We are the sponsor of several defined benefit pension plans which exposes us to market risks related to plan assets and liabilities. Funding requirements for these plans are based on actuarial assumptions concerning expected return on plan assets, future salary increases, life expectancy and interest rates. If any of these assumptions differs from actual outcomes such that a funding deficiency occurs or increases, we would be required to increase cash funding contributions which would in turn reduce the availability of capital for other purposes. We are also subject to regulatory changes regarding these plans which may increase the funding requirements which would in turn reduce the availability of capital for other purposes.

International Sales

A portion of our products are exported to customers in China, Japan and in developing markets. International sales present a number of risks and challenges, including but not limited to the effective marketing of our products in foreign countries, collectability of accounts receivable, tariffs and other barriers to trade and recessionary environments in foreign economies.

Strategic Initiatives

Our future success may in part be dependent on the performance of strategic initiatives, which could include growth in certain segments or markets and acquisitions. There can be no assurance that we will be able to successfully implement important strategic initiatives in accordance with our expectations, which may adversely affect our business, financial results and future growth prospects.

Acquisitions

We may evaluate and complete potential acquisitions from time to time and have in the past grown through acquisitions. However, there is no assurance that we in the future will be able to successfully identify potential acquisitions or efficiently and cost-effectively integrate any assets or business that we acquire without disrupting existing operations.

Acquisitions are subject to a range of inherent risks, including the assumption of incremental regulatory/compliance, pricing, labour relations, litigation, environmental, tax and other risks. Further, we may not be able to successfully integrate or achieve anticipated synergies from those acquisitions which we do complete and/or such acquisitions may be dilutive in the short to medium term. Any of these adverse outcomes could result in us not achieving the financial benefits of prospective acquisitions and have a material adverse effect on our profitability.

Return of Capital to Shareholders

We have returned capital to our shareholders in 2022 through a combination of dividends and share repurchases, both through our normal course issuer bid and our substantial issuer bid. There is no assurance that we will continue to return capital to shareholders in future years, or as to the amount of capital that will be returned. Further, decisions to return capital to shareholders remain at the discretion of our board of directors and shareholders may not agree with the manner and the amounts of capital that are returned to shareholders. The declaration and payment of cash dividends remains within the discretion of our board of directors. Historically, cash dividends have been declared on a quarterly basis payable after the end of each quarter. There is no assurance that our board of directors will continue to maintain our dividend at the current rate. Our board of directors has the power to declare dividends at its discretion and in any manner and at any time as it may deem necessary or appropriate in the future. For these reasons, as well as others, there can be no assurance that dividends that we pay in the future will be equal or similar to the dividends historically paid by West Fraser or that our board of directors will not decide to suspend or discontinue the payment of cash dividends in the future.

Risks Associated with the NYSE Listing and Litigation

The West Fraser Common shares are listed on the NYSE. Our continued listing on the NYSE may expose us to additional regulatory proceedings, litigation (including class actions), mediation, and/or arbitration from time to time, which could adversely affect our business, financial condition and operations. Monitoring and defending against legal actions, with or without merit, can be time-consuming, may divert management’s attention and resources and can cause us to incur significant expenses. In addition, legal fees and costs incurred in connection with such activities may be significant and we

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may, in the future, be subject to judgments or enter into settlements of claims for significant monetary damages. While we have insurance that may cover the costs and awards of certain types of litigation, the amount of insurance may not be sufficient to cover any costs or awards. Substantial litigation costs or an adverse result in any litigation may adversely impact our business, financial condition, or operations. Litigation, and any decision resulting therefrom, may also create a negative perception of West Fraser.

RiskAssociated with Internal Controls

We are required to maintain and evaluate the effectiveness of our internal control over financial reporting under National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings in Canada and under the Securities Exchange Act of 1934 in the United States. Effective internal controls are required for us to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with IFRS. Management assesses the effectiveness of our internal control over financial reporting based on the criteria set forth in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also engage an independent registered public accounting firm to audit and provide an independent opinion on the effectiveness of our internal control over financial reporting.

There is no assurance that we will be able to achieve and maintain the adequacy of our internal control over financial reporting as such standards are modified, supplemented, or amended from time to time, and we may not be able to ensure that we can conclude on an ongoing basis that our internal control over financial reporting are effective. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. No evaluation can provide complete assurance that our internal control over financial reporting will prevent or detect misstatements on a timely basis, or detect or uncover all failures of persons employed by us to disclose material information otherwise required to be reported. The effectiveness of our controls and procedures could also be limited by simple errors or faulty judgments. In addition, as we continue to expand, the challenges involved in implementing appropriate internal control over financial reporting will increase and will require that we continue to improve our internal control over financial reporting.

Our failure to satisfy these requirements on a timely basis could result in the loss of investor confidence in the accuracy and reliability of our financial statements, which in turn could harm our business, expose us to legal or regulatory actions and negatively impact the trading price of our Common shares. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. There can be no assurance that we will be able to remediate material weaknesses, if any, identified in future periods, or maintain all of the controls necessary for continued compliance, and there can be no assurance that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies. Future acquisitions of companies may provide us with challenges in implementing the required processes, procedures and controls in our acquired operations. Acquired companies may not have disclosure controls and procedures or internal control over financial reporting that are as thorough or effective as those required by securities laws currently applicable to us.

Our Common Shares May be Subject to Trading Volatility

Our Common shares will be subject to material fluctuations in trading prices and volumes which may increase or decrease in response to a number of events and factors, which will include:

·	changes in the market price of the commodities that we sell and purchase;
·	current events affecting the economic situation in North America, Europe and the international markets in which our products are sold;
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·	trends in the lumber and OSB industries and other industries in which we operate;
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·	regulatory and/or government actions;
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·	changes in financial estimates and recommendations by securities analysts;
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·	future acquisitions and financings;
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·	the economics of current and future projects undertaken by us;
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·	variations in our operating results, financial condition or dividend policies;
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·	the operating and share price performance of other companies, including those that investors may deem comparable to West Fraser;
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·	the issuance of additional equity securities by us; and
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·	the occurrence of any of the risks and uncertainties described above.

In addition to factors directly affecting West Fraser, our Common shares may also experience volatility that is attributable to the overall state of the stock markets in which wide price swings may occur as a result of a variety of financial, economic and market perception factors. This overall market volatility may adversely affect the price of our Common shares, regardless of our own relative operating performance.

CONTROLS AND PROCEDURES

West Fraser is responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting, each as defined in NI 52-109 in Canada and under the Securities Exchange Act of 1934, as amended, in the United States.

Disclosure Controls and Procedures

We have designed our disclosure controls and procedures to provide reasonable assurance that information that is required to be disclosed by us in our annual filings, interim filings and other reports that we file or submit under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation. These include controls and procedures designed to ensure that information that we are required to disclose under securities legislation is accumulated and communicated to our management, including our President and Chief Executive Officer (“CEO”) and the Senior Vice-President, Finance and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

Our management, under the supervision and with the participation of our CEO and CFO, has conducted an evaluation of our disclosure controls and procedures as of December 31, 2022. Based on this evaluation, management, under the supervision of our CEO and CFO, have concluded that our disclosure controls and procedures are effective as of December 31, 2022.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with IFRS.

Our management, under the supervision of the CEO and CFO, is required under NI 52-109 in Canada and under the Securities Exchange Act of 1934, as amended, in the United States to evaluate the effectiveness of our internal control over financial reporting as of December 31, 2022. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022 based on the criteria set forth in Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management, including the CEO and CFO, has concluded that our internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, in accordance with the standards of the Public Company Accounting Oversight Board (United States). PricewaterhouseCoopers LLP have expressed their opinion in their attestation report included with our annual audited consolidated financial statements and accompanying notes for the year ended December 31, 2022.

There has been no change in our internal control over financial reporting during the year ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Additionally, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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DEFINITIONS, RECONCILIATIONS, AND OTHER INFORMATION

Transactions Between Related Parties

The Company has entered into executive compensation arrangements with key management personnel, consisting of our directors and officers. These individuals have the authority and responsibility for overseeing, planning, directing, and controlling our activities. Total compensation expense for key management personnel was $19 million in 2022, compared to $55 million in 2021. The decrease in compensation expense was due primarily to lower equity-based compensation, influenced by changes in the price of our Common shares, vesting of granted units, and changes in the expected payout multiple on our performance share units. See Note 20 to the Annual Financial Statements for additional details.

Non-GAAP and Other Specified Financial Measures

Throughout this MD&A, we make reference to (i) certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA by segment (our “Non-GAAP Financial Measures”), (ii) certain capital management measures, including available liquidity, total debt to capital ratio, and net debt to capital ratio (our “Capital Management Measures”), and (iii) certain supplementary financial measures, including our expected capital expenditures (our “Supplementary Financial Measures”). We believe that these Non-GAAP Financial Measures, Capital Management Measures, and Supplementary Financial Measures (collectively, our “Non-GAAP and other specified financial measures”) are useful performance indicators for investors to understand our operating and financial performance and our financial condition. These Non-GAAP and other specified financial measures are not generally accepted financial measures under IFRS and do not have standardized meanings prescribed by IFRS. Investors are cautioned that none of our Non-GAAP Financial Measures should be considered as an alternative to earnings or cash flow, as determined in accordance with IFRS. As there is no standardized method of calculating any of these Non-GAAP and other specified financial measures, our method of calculating each of them may differ from the methods used by other entities and, accordingly, our use of any of these Non-GAAP and other specified financial measures may not be directly comparable to similarly titled measures used by other entities. Accordingly, these Non-GAAP and other specified financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The reconciliation of the Non-GAAP measures used and presented by the Company to the most directly comparable IFRS measures is provided in the tables set forth below.

Adjusted EBITDA and Adjusted EBITDA by Segment

Adjusted EBITDA is defined as earnings determined in accordance with IFRS adding back the following line items from the consolidated statements of earnings and comprehensive earnings: finance expense, tax provision or recovery, amortization, equity-based compensation, restructuring and impairment charges, and other.

Adjusted EBITDA by segment is defined as earnings before tax determined for each reportable segment adding back the following line items from the consolidated statements of earnings and comprehensive earnings for that reportable segment: finance expense, amortization, equity-based compensation, restructuring and impairment charges, and other.

EBITDA is commonly reported and widely used by investors and lending institutions as an indicator of a company’s operating performance, ability to incur and service debt, and as a valuation metric. We calculate Adjusted EBITDA and Adjusted EBITDA by segment to exclude items of an unusual nature that do not reflect our ongoing operations and that should not, in our opinion, be considered in a long-term valuation metric or included in an assessment of our ability to service or incur debt.

We believe that disclosing these measures assists readers in measuring performance relative to other entities that operate in similar industries and understanding the ongoing cash generating potential of our business to provide liquidity to fund working capital needs, service outstanding debt, fund future capital expenditures and investment opportunities, and pay dividends. Adjusted EBITDA is used as an additional measure to evaluate the operating and financial performance of our reportable segments.

The following tables reconcile Adjusted EBITDA to the most directly comparable IFRS measure, earnings.

See Note 18 to the Annual Financial Statements for a breakdown of the items making up Other. Other is comprised primarily of foreign exchange revaluations and fair value adjustments on interest rate swap contracts.

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Annual Adjusted EBITDA

( millions)
			2021			2020
Earnings	1,975		$	2,947		$	588
Finance expense, net	3			45			27
Tax provision	618			951			202
Amortization	589			584			203
Equity-based compensation	5			40			9
Restructuring and impairment charges	60			—			—
Other expense (income)	(37	)		2			14
Adjusted EBITDA	3,212		$	4,569		$	1,043
Quarterly Adjusted EBITDA
( millions)
			Q3-22			Q4-21
Earnings (loss)	(94	)	$	216		$	334
Finance (expense) income, net	(3	)		(3	)		1
Tax provision (recovery)	(31	)		80			104
Amortization	148			140			153
Equity-based compensation	6			5			12
Restructuring and impairment charges	47			—			—
Other expense (income)	(2	)		(12	)		11
Adjusted EBITDA	70		$	426		$	615

All values are in US Dollars.

The following tables reconcile Adjusted EBITDA by segment to the most directly comparable IFRS measures for each of our reportable segments. We consider that earnings before tax is the most directly comparable measure for Adjusted EBITDA by segment, given we do not allocate consolidated tax amounts across our reportable segments.

Please refer to the “Adjusted EBITDA” section above for additional details concerning the composition of this measure and how it provides useful information to readers.

Annual Adjusted EBITDA by Segment ($ millions)

2022	Lumber			NA EWP			Pulp & Paper			Europe EWP		Corporate &<br><br><br>Other			Total
Earnings (loss) before tax	$	1,117		$	1,383		$	(23	)	$	118	$	(2	)	$	2,593
Finance expense (income), net		(1	)		4			2			—		(2	)		3
Amortization		186			306			35			53		9			589
Equity-based compensation		—			—			—			—		5			5
Restructuring and impairment charges		31			—			13			15		—			60
Other income		(5	)		(16	)		(1	)		—		(14	)		(37	)
Adjusted EBITDA by segment	$	1,328		$	1,677		$	26		$	186	$	(5	)	$	3,212

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2021			NA EWP			Pulp & Paper			Europe EWP			Corporate &<br><br><br>Other			Total
Earnings (loss) before tax	1,794			2,121			(22	)		112			(107	)		3,898
Finance expense, net	17			3			5			1			19			45
Amortization	164			289			34			88			9			584
Equity-based compensation	—			—			—			—			40			40
Other expense (income)	(2	)		1			(2	)		—			5			2
Adjusted EBITDA by segment	1,973		$	2,414		$	15		$	201		$	(34	)	$	4,569
Quarterly Adjusted EBITDA by Segment ( millions)								****
Q4-22			NA EWP			Pulp & Paper			Europe EWP			Corporate &<br><br><br>Other			Total
Earnings (loss) before tax	(161	)	$	40		$	1		$	1		$	(6	)	$	(125	)
Finance (income) expense, net	(2	)		(1	)		—			—			(1	)		(3	)
Amortization	51			73			9			12			2			148
Equity-based compensation	—			—			—			—			6			6
Restructuring and impairment charges	31			—			—			15			—			47
Other expense (income)	2			(3	)		5			2			(8	)		(2	)
Adjusted EBITDA by segment	(77	)	$	109		$	15		$	30		$	(6	)	$	70
Q3-22			NA EWP			Pulp & Paper			Europe EWP			Corporate &<br><br><br>Other			Total
Earnings (loss) before tax	127		$	144		$	22		$	13		$	(10	)	$	296
Finance (income) expense, net	(5	)		2			1			—			(1	)		(3	)
Amortization	45			71			9			12			3			140
Equity-based compensation	—			—			—			—			5			5
Other expense (income)	(7	)		(2	)		(3	)		(1	)		1			(12	)
Adjusted EBITDA by segment	160		$	215		$	29		$	24		$	(2	)	$	426
Q4-21			NA EWP			Pulp & Paper			Europe EWP			Corporate &<br><br><br>Other			Total
Earnings (loss) before tax	194		$	265		$	(25	)	$	36		$	(32	)	$	438
Finance expense (income), net	(1	)		—			—			1			1			1
Amortization	45			73			9			24			2			153
Equity-based compensation	—			—			—			—			12			12
Other expense	2			5			2			—			2			11
Adjusted EBITDA by segment	240		$	343		$	(14	)	$	61		$	(15	)	$	615

All values are in US Dollars.

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Available liquidity

Available liquidity is the sum of our cash and cash equivalents and funds available under our committed and uncommitted bank credit facilities. We believe disclosing this measure assists readers in understanding our ability to meet uses of cash resulting from contractual obligations and other commitments at a point in time.

Available Liquidity	December 31,		December 31,
****($ millions)	2022		2021
Cash and cash equivalents	$	1,162	$	1,568
Operating lines available (excluding newsprint<br>operation)^1^		1,053		1,025
		2,215		2,593
Cheques issued in excess of funds on deposit		—		—
Borrowings on operating lines		—		—
Available liquidity	$	2,215	$	2,593
1.	Excludes demand line of credit dedicated to our jointly-owned newsprint operation as West Fraser cannot draw on it.<br>
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Total debt to total capital ratio

Total debt to total capital ratio is total debt divided by total capital, expressed as a percentage. Total capital is defined as the sum of total debt plus total equity. This calculation is defined in certain of our bank covenant agreements. We believe disclosing this measure assists readers in understanding our capital structure, financial solvency, and degree of leverage at a point in time.

The following table outlines the composition of the measure.

Total Debt to Capital	December 31,		December 31,
($ millions)	2022		2021
Debt
Operating loans	$	—	$	—
Current and long-term lease obligation		37		28
Current and long-term debt		500		501
Interest rate swaps^1^		—		1
Open letters of credit^1^		61		65
Total debt		598		595
Shareholders’ equity		7,619		7,656
Total capital	$	8,217	$	8,251
Total debt to capital		7%		7%
1.	Letters of credit facilities and the fair value of interest rate swaps are part of our bank covenants’ total debt<br>calculation.
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Net debt to capital ratio

Net debt to capital ratio is net debt divided by total capital, expressed as a percentage. Net debt is calculated as total debt less cash and cash equivalents, open letters of credit, and the fair value of any interest rate swap liabilities. Total capital is defined as the sum of net debt plus total equity. We believe disclosing this measure assists readers in understanding our capital structure, financial solvency, and degree of leverage at a point in time. We believe that using net debt in the calculation is helpful because net debt represents the amount of debt obligations that are not covered by available cash and cash equivalents.

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The following table outlines the composition of the measure.

Net Debt to Capital	December 31,			December 31,
($ millions)	2022			2021
Debt
Operating loans	$	—		$	—
Current and long-term lease obligation		37			28
Current and long-term debt		500			501
Interest rate swaps^1^		—			1
Open letters of credit^1^		61			65
Total debt		598			595
Cash and cash equivalents		(1,162	)		(1,568	)
Open letters of credit		(61	)		(65	)
Interest rate swaps		—			(1	)
Cheques issued in excess of funds on<br>deposit		—			—
Net debt		(625	)		(1,039	)
Shareholders’ equity		7,619			7,656
Total capital	$	6,994		$	6,617
Net debt to capital		(9	%)		(16	%)
1.	Letters of credit facilities and the fair value of interest rate swaps are part of our bank covenants’ total debt<br>calculation.
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Expected capital expenditures

This measure represents our best estimate of the amount of cash outflows relating to additions to capital assets for the upcoming year based on our current outlook. This amount is comprised primarily of various improvement projects and maintenance-of-business expenditures, projects focused on optimization and automation of the manufacturing process, and projects targeted to reduce greenhouse gas emissions. This measure assumes no deterioration in market conditions during the year and that we are able to proceed with our plans on time and on budget. This estimate is subject to the risks and uncertainties identified in this MD&A.

Glossary of Key Terms

We use the following terms in this MD&A:

Term	Description
AAC	Annual allowable cut
ADD	Antidumping duty
Angelina	Angelina Forest Products LLC
Angelina Acquisition	Acquisition of Angelina Forest Products, LLC on December 1, 2021
AR	Administrative Review by the USDOC
B.C.	British Columbia
BCTMP	Bleached chemithermomechanical pulp
CAD or CAD$	Canadian dollars
CEO	President and Chief Executive Officer
CFO	Senior Vice-President, Finance and Chief Financial Officer
CGU	Cash generating unit
COSO	Committee of Sponsoring Organizations of the Treadway Commission
Crown timber	Timber harvested from lands owned by a provincial government
CVD	Countervailing duty
EDGAR	Electronic Data Gathering, Analysis and Retrieval System
ESG	Environmental, Social and Governance

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EWP	Engineered wood products
GHG	Greenhouse gas
IFRS	International Financial Reporting Standards as issued by the International Accounting Standards Board
LVL	Laminated veneer lumber
MDF	Medium-density fibreboard
NA	North America
NA EWP	North America Engineered Wood Products
NBSK	Northern bleached softwood kraft pulp
NCIB	Normal course issuer bid
2021 NCIB	Normal course issuer bid - February 17, 2021 to February 16, 2022
2022 NCIB	Normal course issue bid - February 23, 2022 to February 22, 2023
NI 52-109	National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings
Norbord	Norbord Inc.
Norbord Acquisition	Acquisition of Norbord completed February 1, 2021
NYSE	New York Stock Exchange
OSB	Oriented strand board
POI	Period of Investigation in respect of an USDOC administrative review
PPE	Property, plant, and equipment
Q1-22 or Q1-21	three months ended March 31, 2022 or 2021 and for balance sheet amounts as at March 31, 2022 or 2021
Q2-22 or Q2-21	three months ended June 30, 2022 or 2021 and for balance sheet amounts as at June 30, 2022 or 2021
Q3-22 or Q3-21	three months ended September 30, 2022 or 2021 and for balance sheet amounts as at September 30, 2022 or 2021
Q4-22 or Q4-21	three months ended December 31, 2022 or 2021 and for balance sheet amounts as at December 31, 2022 or 2021
SEDAR	System for Electronic Document Analysis and Retrieval
2021 SIB	Our substantial issuer bid completed in August 2021
2022 SIB	Our substantial issuer bid completed in June 2022
SOX	Section 404 of the Sarbanes-Oxley Act
SPF	Spruce/pine/balsam fir lumber
SYP	Southern yellow pine lumber
TSX	Toronto Stock Exchange
U.K.	United Kingdom
UKP	Unbleached kraft pulp
U.S.	United States
USD or $ or US$	United States Dollars
USDOC	United States Department of Commerce
USITC	United States International Trade Commission

Forward-Looking Statements

This MD&A includes statements and information that constitutes “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Forward-looking statements include statements that are forward-looking or predictive in nature and are dependent upon or refer to future events or conditions. We use words such as “expects,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “projects,” “forecasts” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may,” “will,” “should,” “would” and “could” to identify these forward-looking statements. These forward-looking statements generally include statements which reflect management’s expectations regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of West

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Fraser and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods.

Forward-looking statements included in this MD&A include references to:

Discussion	Forward-Looking Statements
Corporate Strategy	our corporate strategy and objectives to generate strong financial results, maintain a strong balance sheet and liquidity profile along with an investment-grade debt rating, to maintain a leading cost position and to return<br>capital to shareholders, reinvest in operations, renewable building materials, and achieve science-based targets to achieve near-term greenhouse gas reductions across all our operations
Recent Developments – Markets	impact of interest rates, housing demand, housing prices, inflationary pressures on demand for lumber and OSB, and expectations regarding near, medium and longer-term core demand
Recent Developments - CVD and ADD Duty Rates	estimates of potential recovery and combined cash deposit rate if preliminary results from the AR4 POI are confirmed
Discussion & Analysis of Annual Results by Product Segment - Lumber Segment - Softwood Lumber Dispute	administrative review commencement, adjustment of export duty rates, proceedings related to duty rates, and timing of finalization of duty rates
Business Outlook – Markets	market conditions, demand for our products over the near, medium and longer term, impacts of interest rates, Ukraine conflict, inflationary pressures, including increases in energy prices, transportation constraints, final AR4<br>and AR5 duty rates; and ability to capitalize on long-term opportunities
Business Outlook – Operations	production levels, demand expectations, projected SPF and SYP lumber shipments, projected OSB shipments, projected pulp and paper shipments, operating costs, B.C. and Alberta stumpage rates and U.S. South log costs, the impact of<br>inflationary pressures and availability constraints for labour, transportation, raw materials such as resins and chemicals, and energy, expectations as to availability of transportation services, the timing, costs of restart, ramp up period to<br>target production and contribution to shipments of Allendale OSB facility, and the overall OSB platform with modern Allendale facility
Business Outlook – Cash Flows	projected cash flows from operations and available liquidity, projected capital expenditures (including with respect to the modernization of the Henderson, Texas lumber manufacturing facility), expected results of capital<br>expenditures, including improvements, maintenance, optimization and automation projects and projects targeted to reduce greenhouse gas emissions, maintenance of our investment grade debt rating, strategic growth opportunities, expected continuity of<br>dividends and share repurchases
Liquidity and Capital Resources - Capital Management Framework	capital management framework and objectives

By their nature, these forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predictions, forecasts, and other forward-looking statements will not occur. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to:

·	assumptions in connection with the economic and financial conditions in the U.S., Canada, U.K., Europe and globally and consequential demand for our products, including the impact of the conflict in the Ukraine;
·	continued increases in interest rates and inflation could impact housing affordability and repair and remodelling demand, which could reduce demand for our products;
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·	global supply chain issues may result in increases to our costs and may contribute to a reduction in near-term demand for our products;
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·	risks inherent to product concentration and cyclicality;
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·	effects of competition for logs and fibre resources and product pricing pressures, including continued access to log supply and fibre resources at competitive prices and the impact of third-party certification<br>standards;
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·	effects of variations in the price and availability of manufacturing inputs, including energy, employee wages, resin and other input costs, and the impact of inflationary pressures on the costs of these manufacturing<br>costs, including increases in stumpage fees and log costs;
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·	availability and costs of transportation services, including truck and rail services, and port facilities, the impacts on transportation services of wildfires and severe weather events, and the impact of increased<br>energy prices on the costs of transportation services;
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·	transportation constraints may negatively impact our ability to meet projected shipment volumes;
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·	the timing of our planned capital investments may be delayed, the ultimate costs of these investments may be increased as a result of inflation, and the projected rates of return may not be achieved;
·	various events that could disrupt operations, including natural, man-made or catastrophic events including wildfires and any state of emergency and/or evacuation orders issued by<br>governments and ongoing relations with employees;
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·	risks inherent to customer dependence;
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·	impact of future cross border trade rulings or agreements;
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·	implementation of important strategic initiatives and identification, completion and integration of acquisitions;
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·	impact of changes to, or non-compliance with, environmental or other regulations;
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·	the impact of the COVID-19 pandemic on our operations and on customer demand, supply and distribution and other factors;
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·	government restrictions, standards or regulations intended to reduce greenhouse gas emissions;
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·	our inability to achieve our SBTi commitment for the reduction of greenhouse gases as planned;
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·	continued governmental approvals and authorizations to access timber supply;
---	---
·	changes in government policy and regulation, including actions taken by the Government of British Columbia pursuant to recent amendments to forestry legislation and initiatives to defer logging of forests deemed<br>“old growth” and the impact of these actions on our timber supply;
---	---
·	impact of weather and climate change on our operations or the operations or demand of its suppliers and customers;
---	---
·	ability to implement new or upgraded information technology infrastructure;
---	---
·	impact of information technology service disruptions or failures;
---	---
·	impact of any product liability claims in excess of insurance coverage;
---	---
·	risks inherent to a capital intensive industry;
---	---
·	impact of future outcomes of tax exposures;
---	---
·	potential future changes in tax laws, including tax rates;
---	---
·	investigations, claims and legal, regulatory and tax proceedings covering matters which if resolved unfavourably may result in a loss to the Company;
---	---
·	effects of currency exposures and exchange rate fluctuations;
---	---
·	future operating costs;
---	---
·	availability of financing, bank lines, securitization programs and/or other means of liquidity;
---	---
·	continued access to timber supply in the traditional territories of Indigenous Nations;
---	---
·	our ability to continue to maintain effective internal control over financial reporting;
---	---
·	the risks and uncertainties described in this 2022 Annual MD&A; and
---	---
·	other risks detailed from time to time in our annual information forms, annual reports, MD&A, quarterly reports and material change reports filed with and furnished to securities regulators.
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In addition, actual outcomes and results of these statements will depend on a number of factors including those matters described under “Risks and Uncertainties” and may differ materially from those anticipated or projected. This list of important factors affecting forward-looking statements is not exhaustive and reference should be made to the other factors discussed in public filings with securities regulatory authorities. Accordingly, readers should exercise caution in relying upon forward-looking statements and we undertake no obligation to publicly update or revise any forward-looking statements, whether written or oral, to reflect subsequent events or circumstances except as required by applicable securities laws.

Additional Information

Additional information on West Fraser, including our Annual Information Form and other publicly filed documents, is available on the Company’s website at www.westfraser.com, on SEDAR at www.sedar.com and on the EDGAR section of the SEC website at www.sec.gov/edgar.shtml.

Where this MD&A includes information from third parties, we believe that such information (including information from industry and general publications and surveys) is generally reliable. However, we have not independently verified any such third-party information and cannot assure you of its accuracy or completeness.

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West Fraser Timber Co. Ltd.

Audited Consolidated Financial Statements

December 31, 2022 and 2021

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RESPONSIBILITY OF MANAGEMENT

Management’s Report on the Consolidated Financial Statements

The accompanying consolidated financial statements and related notes are the responsibility of the management of West Fraser Timber Co. Ltd. (the “Company”). They have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and include amounts based on estimates and judgments. Financial information included elsewhere in this report is consistent with the consolidated financial statements.

The consolidated financial statements are approved by the Board of Directors on the recommendation of the Audit Committee. The Audit Committee, appointed by the Board of Directors, is composed entirely of independent directors. The Audit Committee reviews the Company’s consolidated financial statements and reports its findings to the Board of Directors for consideration before the consolidated financial statements are approved for issuance to shareholders and submitted to securities commissions or other regulatory authorities.

The Audit Committee’s duties also include reviewing critical accounting policies and significant estimates and judgments underlying the consolidated financial statements as presented by management and approving the fees of the Company’s independent registered public accounting firm.

The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, performed an audit of the consolidated financial statements, the results of which are reflected in their Report of Independent Registered Public Accounting Firm for 2022. PricewaterhouseCoopers LLP has full and independent access to the Audit Committee to discuss their audit and related matters.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings and Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with IFRS.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Also, projections of any evaluation of its effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under our supervision, management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the criteria set forth in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, as stated in their report which appears herein.

/s/ Raymond Ferris	/s/ Chris Virostek
Raymond Ferris	Chris Virostek
President and Chief Executive Officer	Senior Vice-President, Finance and Chief Financial Officer
February 14, 2023

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of West Fraser Timber Co. Ltd.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of West Fraser Timber Co. Ltd. and its subsidiaries (together, the Company) as of December 31, 2022 and 2021, and the related consolidated statements of earnings and comprehensive earnings, of changes in shareholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework **** (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits

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also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessments

As described in Note 8 to the consolidated financial statements, the Company’s goodwill balance was $1,944 million as of December 31, 2022. Management conducts an impairment assessment as of December 31 of each year, or more frequently if an indicator of impairment is identified. Management assesses the recoverability of goodwill by comparing the carrying value of each cash generating unit (CGU) associated with the goodwill balance to its estimated recoverable amount, which is the higher of

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its estimated fair value less costs of disposal and its value in use. An impairment charge is recorded if the carrying value exceeds the estimated recoverable amount of a CGU. Management has determined the recoverable amount of each applicable CGU based on its value in use through a discounted cash flow model. The key assumptions used in the discounted cash flow models include production volume, product pricing, raw material input cost, production cost, terminal multiple and the discount rates. The estimated recoverable amount of each applicable CGU exceeded its respective carrying amount in management’s goodwill impairment assessments, and as such, no impairment losses were recorded by management.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments is a critical audit matter are (i) the significant judgment by management when determining the recoverable amount of each applicable CGU, including the development of key assumptions; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s key assumptions in the discounted cash flow models related to production volume, product pricing, raw material input cost, production cost, terminal multiple and the discount rates; and (iii) the audit effort involved the use of professionals with specialized skills and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the determination of the recoverable amount of the applicable CGUs. These procedures also included, among others, testing management’s process for determining the recoverable amount of the applicable CGUs, including evaluating the appropriateness of the discounted cash flow models, testing the completeness and accuracy of underlying data used in the models and evaluating the reasonableness of the key assumptions used by management. Evaluating the reasonableness of the production volume, product pricing, raw material input cost and production cost involved considering the past performance of the CGUs, as well as economic and industry forecasts, as applicable. Professionals with specialized skill and knowledge were used to assist in the evaluation of the appropriateness of the discounted cash flow models, and the reasonableness of the terminal multiple and the discount rates.

/s/PricewaterhouseCoopers LLP

Chartered Professional Accountants

Vancouver, Canada

February 14, 2023

We have served as the Company’s auditor since 1973.

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West Fraser Timber Co. Ltd.

Consolidated Balance Sheets

(in millions of United States dollars, exceptwhere indicated)

			As at December			As at December
	Note		31, 2022			31, 2021
Assets
Current assets
Cash and cash equivalents		4	$	1,162		$	1,568
Receivables		23		350			508
Income taxes receivable				145			42
Inventories		5		1,032			1,061
Prepaid expenses				60			38
				2,749			3,217
Property, plant and equipment		6		3,982			4,100
Timber licences		7		351			368
Goodwill and other intangible assets		8		2,358			2,440
Export duty deposits		26		354			242
Other assets		9		175			58
Deferred income tax assets		19		4			8
			$	9,973		$	10,433
Liabilities
Current liabilities
Payables and accrued liabilities		10	$	722		$	848
Current portion of reforestation and decommissioning obligations		11		58			46
Income taxes payable				12			312
				792			1,206
Long-term debt		12		499			499
Other liabilities		11		268			360
Deferred income tax liabilities		19		795			712
				2,354			2,777
Shareholders’ Equity
Share capital		14		2,667			3,402
Retained earnings				5,284			4,503
Accumulated other comprehensive loss				(332	)		(249	)
				7,619			7,656
			$	9,973		$	10,433

Approved by the Board of Directors

/s/ Reid Carter	/s/ Robert L. Phillips
Reid Carter	Robert L. Phillips
Director	Director

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West Fraser Timber Co. Ltd.

Consolidated Statements of Earnings and Comprehensive Earnings

(in millionsof United States dollars, except where indicated)

		Years Ended
		December 31,			December 31,
		2022			2021
Sales		$	9,701		$	10,518
Costs and expenses
Cost of products sold			5,142			4,645
Freight and other distribution costs			963			846
Export duties, net	26		18			146
Amortization			589			584
Selling, general and administration			365			312
Equity-based compensation	15		5			40
Restructuring and impairment charges	16		60			—
			7,142			6,573
Operating earnings			2,559			3,945
Finance expense, net	17		(3	)		(45	)
Other income (expense)	18		37			(2	)
Earnings before tax			2,593			3,898
Tax provision	19		(618	)		(951	)
Earnings		$	1,975		$	2,947
Earnings per share (dollars)
Basic	21	$	21.06		$	27.03
Diluted	21	$	20.86		$	27.03
Comprehensive earnings
Earnings		$	1,975		$	2,947
Other comprehensive earnings
Items that may be reclassified to earnings
Translation loss on operations with different functional currencies			(83	)		(9	)
Items that will not be reclassified to earnings
Actuarial gain on retirement benefits, net of tax			164			153
			81			144
Comprehensive earnings		$	2,056		$	3,091

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West Fraser Timber Co. Ltd.

Consolidated Statements of Changes in Shareholders’ Equity

(inmillions of United States dollars, except where indicated)

			Share Capital												Accumulated<br><br><br>Other<br> <br>Comprehensive<br><br><br>Loss
			Number of						Contributed			Retained						Total
	Note		shares			Amount			Surplus			Earnings						Equity
Balance at December 31, 2020				68,678,622		$	481		$	—		$	2,237		$	(240	)		$	2,478
Earnings for the year				—			—			—			2,947			—				2,947
Other comprehensive earnings:
Translation loss on operations with different functional currencies				—			—			—			—			(9	)			(9	)
Actuarial gain on retirement benefits, net of tax				—			—			—			153			—				153
Acquired equity-settled share option plan				—			—			14			—			—				14
Equity-settled share option expense				—			—			1			—			—				1
Conversion of equity-settled share option plan to cash-settled				—			—			(15	)		—			—				(15	)
Issuance of Common shares		3, 14		54,618,586			3,491			—			—			—				3,491
Repurchase of Common shares for cancellation		14		(17,368,474	)		(570	)		—			(749	)		—				(1,319	)
Dividends declared^1^				—			—			—			(85	)		—				(85	)
Balance at December 31, 2021				105,928,734		$	3,402		$	—		$	4,503		$	(249	)		$	7,656
Earnings for the year				—			—			—			1,975			—				1,975
Other comprehensive earnings:
Translation loss on operations with different functional currencies				—			—			—			—			(83	)			(83	)
Actuarial gain on retirement benefits, net of tax				—			—			—			164			—				164
Repurchase of Common shares for cancellation		14		(22,373,320	)		(735	)		—			(1,255	)		—				(1,990	)
Dividends declared^1^				—			—			—			(103	)		—				(103	)
Balance at December 31, 2022				83,555,414		$	2,667		$	—		$	5,284		$	(332	)		$	7,619
1.	Cash dividends declared during the year ended December 31, 2021 comprised of CAD$0.70 per share in aggregate for the<br>first three quarters and USD$0.20 per share for the fourth quarter. Cash dividends declared during the year ended December 31, 2022 were USD$1.15 per share.
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West Fraser Timber Co. Ltd.

Consolidated Statements of Cash Flows

(in millions of United Statesdollars, except where indicated)

			Years Ended
			December 31,			December 31,
	Note		2022			2021
Cash provided by operating activities
Earnings			$	1,975		$	2,947
Adjustments
Amortization				589			584
Restructuring and impairment charges		16		60			—
Finance expense, net		17		3			45
Foreign exchange (gain) loss				(28	)		5
Export duty		26		(99	)		14
Retirement benefit expense		13		103			111
Contributions to retirement benefit plans		13		(76	)		(77	)
Tax provision		19		618			951
Income taxes paid				(982	)		(946	)
Other				(11	)		(13	)
Changes in non-cash working capital
Receivables				140			5
Inventories				20			(139	)
Prepaid expenses				(6	)		(14	)
Payables and accrued liabilities				(99	)		79
				2,207			3,552
Cash used for financing activities
Repayment of long-term debt				—			(667	)
Repayment of lease obligations				(14	)		(9	)
Make-whole premium paid				—			(60	)
Finance expense paid				(23	)		(37	)
Financing fees paid				—			(4	)
Repurchase of Common shares for cancellation		14		(1,990	)		(1,319	)
Issuance of Common shares				—			7
Dividends paid				(99	)		(75	)
				(2,126	)		(2,164	)
Cash used for investing activities
Acquired cash and cash equivalents from Norbord<br>Acquisition^1^		3		—			642
Angelina Acquisition, net of cash acquired		3		—			(302	)
Additions to capital assets				(477	)		(635	)
Interest received				17			2
Other				1			7
				(459	)		(286	)
Change in cash and cash equivalents				(378	)		1,102
Foreign exchange effect on cash and cash equivalents				(28	)		5
Cash and cash equivalents - beginning of period				1,568			461
Cash and cash equivalents - end of period			$	1,162		$	1,568
1.	The Norbord Acquisition was a non-cash share consideration transaction and<br>therefore only the acquired cash is included in the cash flow statement. Changes in Norbord’s cash position subsequent to February 1, 2021 are incorporated into the cash flow statement.
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West Fraser Timber Co. Ltd.

Notes to Consolidated Financial Statements

For the years ended December 31, 2022 and 2021

(figures are in millions of United States dollars, except where indicated)

1.	Nature of operations

West Fraser Timber Co. Ltd. (“West Fraser”, the “Company”, “we”, “us” or “our”) is a diversified wood products company with more than 60 facilities in Canada, the United States (“U.S.”), the United Kingdom (“U.K.”), and Europe. From responsibly sourced and sustainably managed forest resources, the Company produces lumber, engineered wood products (OSB, LVL, MDF, plywood, and particleboard), pulp, newsprint, wood chips, other residuals and renewable energy. West Fraser’s products are used in home construction, repair and remodelling, industrial applications, papers, tissue, and box materials. Our executive office is located at 885 West Georgia Street, Suite 1500, Vancouver, British Columbia. West Fraser was formed by articles of amalgamation under the Business Corporations Act (British Columbia) and is registered in British Columbia, Canada. Our Common shares are listed for trading on the Toronto Stock Exchange (“TSX”) and on the New York Stock Exchange (“NYSE”) under the symbol WFG.

2.	Basis of presentation

These consolidated financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and were approved by our Board of Directors on February 14, 2023.

Our consolidated financial statements have been prepared under the historical cost basis, except for certain items as discussed in the applicable accounting policies. Figures have been rounded to millions of dollars to reflect the accuracy of the underlying balances and as a result certain tables may not add due to rounding impacts.

Accounting policies

Accounting policies that relate to the consolidated financial statements as a whole are incorporated in this note. Where an accounting policy is applicable to a specific note disclosure, the policy is described within the respective note.

Basis of consolidation

These consolidated financial statements include the accounts of West Fraser and its wholly-owned subsidiaries after the elimination of intercompany transactions and balances.

Our material subsidiaries are West Fraser Mills Ltd. and Norbord Inc. Our 50%-owned joint operations, Alberta Newsprint Company and Cariboo Pulp & Paper Company, are accounted for by recognizing our share of the assets, liabilities, revenues, and expenses related to these joint operations.

Use of estimates and judgments

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts could differ materially from these and other estimates, the impact of which would be recorded in future periods. Management is also required to exercise judgment in the process of applying accounting policies. Information about the significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:

• Note 2 – Determination of functional currency<br><br><br>• Note 3 – Fair value of PPE and intangible assets acquired in business combinations<br><br><br>• Note 5 – Valuation of inventories<br><br><br>• Note 6-8, 16 – Recoverability of PPE, timber licences, and<br>other intangible assets<br> <br>• Note 6 – Estimated useful lives of PPE	• Note 8 – Recoverability of goodwill<br><br><br>• Note 11 – Reforestation and decommissioning obligations<br><br><br>• Note 13 – Defined benefit pension plans<br><br><br>• Note 15 – Equity-based compensation<br><br><br>• Note 19 – Income taxes<br><br><br>• Note 26 – CVD and ADD duty dispute

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Revenue recognition

Revenue is derived primarily from product sales and is recognized when a customer obtains control over the goods. The timing of transfer of control to customers varies depending on the individual terms of the sales contract and typically occurs when the product is loaded on a common carrier at our mill, loaded on an ocean carrier, or delivered to the customer. The amount of revenue recognized is net of our estimate for early payment discounts and volume rebates.

Revenue includes charges for freight and handling. The costs related to these revenues are recorded in freight and other distribution costs.

Reporting currency and foreign currency translation

The consolidated financial statements are presented in USD, which is determined to be the functional currency of our U.S. operations and the majority of our Canadian operations.

For these entities, all transactions not denominated in our U.S. functional currency are considered to be foreign currency transactions. Foreign currency denominated monetary assets and liabilities are translated using the rate of exchange prevailing at the reporting date. Gains or losses on translation of these items are included in earnings and reported as Other. Foreign currency denominated non-monetary assets and liabilities, measured at historic cost, are translated at the rate of exchange at the transaction date.

Impairment of capital assets

Impairment testing is applied to individual assets or cash generating units (“CGUs”), the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or groups of assets. We have identified each of our mills as a CGU for impairment testing unless there is economic interdependence of CGUs, in which case they are grouped for impairment testing.

When a triggering event is identified, the recoverability of an asset or CGU is assessed by comparing the carrying amount of the asset or CGU to the estimated recoverable amount, which is the higher of its estimated fair value less costs of disposal and its value in use.

Fair value less costs of disposal is determined by ascertaining the price that would be received to sell an asset in an orderly transaction between market participants under current market conditions, less incremental costs directly attributable to the disposal. Value in use is determined using a discounted cash flow model by measuring the pre-tax cash flows expected to be generated from the asset over its estimated useful life discounted by a pre-tax discount rate.

Where an impairment loss for an asset or CGU subsequently reverses, the carrying amount of the asset or CGU is increased to the lesser of the revised estimate of its recoverable amount and the carrying amount that would have been recorded had no impairment loss been previously recognized.

Fair value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurement are observable and the significance of the inputs.

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The three levels of the fair value hierarchy are:

Level 1

Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2

Values based on inputs other than quoted prices that are observable for the asset or liability, directly or indirectly.

Level 3

Values based on valuation techniques that require inputs which are both unobservable and significant to the overall fair value measurement.

Accounting standards, amendments and interpretations issued but not yet applied

Amendments to IAS 1, Presentation of Financial Statements

In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1). The amendments clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. The amendments also clarify the definition of a settlement and provide situations that would be considered as a settlement of a liability. In October 2022, the IASB issued Non-current Liabilities with Covenants (Amendments to IAS 1). These further amendments clarify how to address the effects on classification and disclosure of **** covenants that an entity is required to comply with on or before the reporting date and covenants that an entity must comply with only after the reporting date. The amendments are effective for reporting periods beginning on or after January 1, 2024. We have not yet determined the impact that these amendments will have on our consolidated financial statements.

There are no other standards or amendments or interpretations to existing standards issued but not yet effective which are expected to have a material impact on our consolidated financial statements.

3.	Business acquisitions

Accounting policies

Business combinations are accounted for using the acquisition method. We measure goodwill at the acquisition date as the fair value of the consideration transferred less the fair value of the identifiable assets acquired and liabilities assumed. The determination of the fair value of the assets acquired and liabilities assumed requires management to use estimates that contain uncertainty and critical judgments. Transaction costs in connection with business combinations are expensed as incurred.

Valuation techniques utilized

We engaged a valuations expert to assist with the determination of estimated fair value for acquired working capital, property, plant and equipment, and certain intangible assets.

We applied the market comparison technique and cost technique in determining the fair value of acquired property, plant, and equipment. We considered market prices for similar assets when they were available, and depreciated replacement cost in other circumstances. Depreciated replacement cost reflects adjustments for physical deterioration as well as functional and economic obsolescence. The key assumptions used in the estimation of depreciated replacement cost are the asset’s estimated replacement cost at the time of acquisition and estimated useful life.

We applied the multi-period excess earnings method in determining the fair value of the customer relationship intangible recognized in the Norbord Inc. (“Norbord”) and Angelina Forest Products acquisitions. The multi-period excess earnings method considers the present value of incremental after-tax cash flows expected to be generated by the customer relationship after deducting contributory asset charges. The key assumptions used in applying the valuation technique include: the forecasted revenues relating to the acquiree’s existing customers at the time of acquisition, the forecasted attrition rates relating to these customers, forecasted operating margins, and discount rate.

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Supporting information

Norbord acquisition

On February 1, 2021, we acquired all of the outstanding shares of Norbord. According to the terms of the Norbord acquisition, Norbord shareholders received 0.675 of a West Fraser share for each Norbord share held. The result was the issuance of 54,484,188 Common shares of West Fraser at a price of US$63.90 per share (CAD$81.94 per share) for $3,482 million.

Included in the Norbord acquisition are five OSB mills in Canada, seven OSB mills in the U.S., one OSB mill, one MDF plant and two particleboard plants in the U.K., one OSB mill in Belgium, and their related corporate offices.

We have incorporated the North American operations of Norbord into our Panels segment and renamed that segment North America (“NA”) Engineered Wood Products (“EWP”). This segment includes the results from North American operations for OSB, plywood, MDF, and LVL. In addition, we have identified a Europe EWP segment, which includes the results from the U.K. and Belgium operations for OSB, MDF and particleboard. The EWP segments have been separated due to differences in the operating region, customer base, operating margins and sales volumes.

The Norbord Acquisition has been accounted for as an acquisition of a business in accordance with IFRS 3, BusinessCombinations. We have allocated the purchase price based on our estimated fair value of the assets acquired and the **** liabilities assumed as follows:

West Fraser purchaseconsideration:
Fair value of West Fraser shares issued	$	3,482
Fair value of equity-based compensation instruments		24
	$	3,506
Fair value of net assets acquired:
Cash and cash equivalents	$	642
Accounts receivable		232
Inventories		334
Prepaid expenses		12
Property, plant and equipment		2,088
Timber licenses		10
Other non-current assets		6
Other intangibles		17
Customer relationship intangible		470
Goodwill		1,339
Payables and accrued liabilities		(301	)
Income tax payable		(155	)
Current portion of reforestation and decommissioning obligations		(2	)
Long-term debt		(720	)
Other non-current liabilities		(36	)
Deferred income tax liabilities		(430	)
	$	3,506

Balances that required significant fair value adjustments for purchase price accounting included inventory, property, plant and equipment, and customer relationship intangibles. The resulting goodwill and deferred income tax liabilities were also significant.

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80 ****

Angelina Forest Products acquisition

On December 1, 2021, we acquired the Angelina Forest Products (“Angelina Acquisition” or “Angelina”) lumber mill located in Lufkin, Texas for cash consideration of $311 million. This acquisition has been accounted for as an acquisition of a business in accordance with IFRS 3, Business Combinations. We have allocated the purchase price based on our estimated fair value of the assets acquired and the liabilities assumed as follows:

West Fraser purchaseconsideration:
Cash consideration	$	311
Fair value of net assets acquired:
Cash	$	8
Accounts receivable		7
Inventories		11
Property, plant and equipment		213
Customer relationship intangible		21
Goodwill		58
Payables and accrued liabilities		(7	)
	$	311

Through the process of finalizing the purchase price allocation during the quarter ended March 31, 2022, we reclassified $21 million from goodwill to customer relationship intangible asset.

4.	Cash and cash equivalents

Accounting policies

Cash and cash equivalents consist of cash on deposit and short-term interest-bearing securities maturing within three months of the date of purchase.

Supporting information

As at	December 31,2022		December 31,2021
Cash	$	706	$	847
Cash equivalents		456		721
	$	1,162	$	1,568
5.	Inventories
---	---

Accounting policies

Inventories are valued at the lower of cost and net realizable value, with cost determined on an average cost basis. The cost of finished goods inventories includes direct material, direct labour, and an allocation of overhead.

Supporting information

As at	December 31,2022		December 31,2021
Manufactured products	$	428	$	446
Logs and other raw materials		376		412
Materials and supplies		228		203
	$	1,032	$	1,061

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Inventories at December 31, 2022 were subject to a valuation reserve of $61 million (December 31, 2021 - $6 million) to reflect net realizable value being lower than cost.

The carrying amount of inventory recorded at net realizable value was $232 million at December 31, 2022 (December 31, 2021 - $42 million), with the remaining inventory recorded at cost.

6.	Property, plant and equipment

Accounting policies

Property, plant and equipment are recorded at historical cost, less accumulated amortization and impairment losses. Expenditures for additions and improvements are capitalized. Borrowing costs are capitalized when the asset construction period exceeds 12 months and the borrowing costs are directly attributable to the asset. Expenditures for maintenance and repairs are charged to earnings. Upon retirement, disposal, or destruction of an asset, the cost and related amortization are derecognized and any resulting gain or loss is included in earnings.

Property, plant and equipment are amortized on a straight-line basis over their estimated useful lives as follows:

Buildings	10 - 30 years
Manufacturing plant, equipment and machinery	6 - 25 years
Fixtures, mobile and other equipment	3 - 10 years
Roads and bridges	Not exceeding 40 years
Major maintenance shutdowns	1 - 2 years

Construction-in-progress includes the purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for its intended use. Construction-in-progress is not depreciated. Once the asset is complete and available for use, the construction-in-progress balance is transferred to the appropriate category of property, plant and equipment, and depreciation commences.

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Supporting Information

	Manufacturingplant,<br><br><br>equipment andmachinery			Construction-<br> <br>in-progress			Roads<br><br><br>and<br><br><br>bridges			Other			Total
As at December 31, 2020	$	1,449		$	138		$	37		$	33		$	1,657
Acquisitions (note 3)		2,163			118			—			20			2,301
Additions^2^		472			173			17			3			665
Amortization^1^		(497	)		—			(13	)		—			(510	)
Foreign exchange		(8	)		(1	)		—			—			(9	)
Disposals		(4	)		—			—			—			(4	)
Transfers		176			(176	)		—			—			—
As at December 31,<br>2021	$	3,751		$	252		$	41		$	56		$	4,100
As at December 31, 2021
Cost	$	6,500		$	252		$	140		$	62		$	6,954
Accumulated amortization		(2,749	)		—			(99	)		(6	)		(2,854	)
Net	$	3,751		$	252		$	41		$	56		$	4,100
As at December 31, 2021	$	3,751		$	252		$	41		$	56		$	4,100
Additions		117			343			16			6			482
Amortization^1^		(494	)		—			(13	)		—			(507	)
Impairment (note 16)		(43	)		(3	)		—			(2	)		(48	)
Foreign exchange		(37	)		(2	)		—			(1	)		(40	)
Disposals		(3	)		(2	)		—			—			(5	)
Transfers		229			(229	)		—			—			—
As at December 31,<br>2022	$	3,520		$	359		$	44		$	59		$	3,982
As at December 31, 2022
Cost	$	6,702		$	359		$	157		$	65		$	7,283
Accumulated amortization		(3,182	)		—			(113	)		(6	)		(3,301	)
Net	$	3,520		$	359		$	44		$	59		$	3,982
1.	Amortization of $499 million relates to cost of products sold and $8 million relates to selling, general and<br>administration expense (2021 - $506 million and $4 million, respectively).
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2.	Manufacturing plant, equipment and machinery additions for the year ended December 31, 2021 include $276 million<br>relating to the acquisition of the idled OSB mill near Allendale, South Carolina.
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7.	Timber licences
---	---

Accounting policies

Timber licences, which are renewable or replaceable, are recorded at historical cost, less accumulated amortization and impairment losses. Timber licences are amortized on a straight-line basis over their estimated useful lives of 40 years.

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Supporting information

	Timber licences
As at December 31, 2020	$	372
Acquisitions (note 3)		10
Additions		2
Amortization^1^		(16	)
As at December 31,<br>2021	$	368
As at December 31, 2021
Cost	$	641
Accumulated amortization		(273	)
Net	$	368
As at December 31, 2021	$	368
Amortization^1^		(17	)
As at December 31,<br>2022	$	351
As at December 31, 2022
Cost	$	641
Accumulated amortization		(290	)
Net	$	351
1.	Amortization relates to cost of products sold.
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8.	Goodwill and other intangibles
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Accounting policies

Goodwill represents the excess purchase price paid for a business acquisition over the fair value of the net assets acquired. Goodwill is tested annually for impairment at December 31, or more frequently if an indicator of impairment is identified.

The customer relationship intangible asset relates to the Norbord and Angelina Forest Products acquisitions and are amortized straight-line over 3 - 10 years.

Other intangibles are recorded at historical cost less accumulated amortization and impairments. Other intangibles include software which is amortized over periods of up to five years and non-replaceable finite term timber rights which are amortized as the related timber volumes are logged.

Goodwill is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the business combination from which it arose. The allocation is based on the lowest level at which goodwill is monitored internally.

An impairment write-down is recorded if the carrying value exceeds the estimated recoverable amount. Goodwill impairment losses cannot be reversed.

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Supporting information

	Goodwill			CustomerRelationshipIntangible			Other			Total
As at December 31, 2020	$	559		$	—		$	32		$	591
Acquisitions (note 3)		1,417			470			17			1,904
Additions		—			—			7			7
Amortization^1^		—			(43	)		(15	)		(58	)
Foreign exchange		(1	)		(1	)		—			(2	)
Disposals		—			—			(2	)		(2	)
As at December 31,<br>2021	$	1,975		$	426		$	39		$	2,440
As at December 31, 2021
Cost	$	1,975		$	469		$	79		$	2,523
Accumulated amortization		—			(43	)		(40	)		(83	)
Net	$	1,975		$	426		$	39		$	2,440
As at December 31, 2021	$	1,975		$	426		$	39		$	2,440
Amortization^1^		—			(54	)		(11	)		(65	)
Foreign exchange		(11	)		(3	)		(1	)		(15	)
Finalization of purchase price allocation on Angelina acquisition (note 3)		(20	)		21			—			1
Other		—			—			(3	)		(3	)
As at December 31,<br>2022	$	1,944		$	390		$	24		$	2,358
As at December 31, 2022
Cost	$	1,944		$	486		$	74		$	2,504
Accumulated amortization		—			(96	)		(50	)		(146	)
Net	$	1,944		$	390		$	24		$	2,358
1.	Amortization of $65 million relates to selling, general and administration expense (2021 - amortization of<br>$1 million relates to cost of products sold and amortization of $57 million relates to selling, general and administration expense).
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Goodwill

For the purposes of impairment testing, goodwill has been allocated to the following CGU groups:

As at	December 31,2022		December 31,2021
Canadian lumber	$	171	$	171
US lumber		409		429
North America EWP		1,280		1,280
Europe EWP		84		95
Total	$	1,944	$	1,975

The recoverable amounts of the above CGU groups were determined based on their value in use using discounted cash flow models. Cash flow forecasts were based on internal estimates for 2023 and 2024 and estimated mid-cycle earnings for subsequent years. Key assumptions include production volume, product pricing, raw material input cost, production cost, terminal multiple, and discount rate. Key assumptions were determined using external sources and historical data from internal sources. Specifically, product pricing has been estimated by reference to average historical prices as well as third-party analyst projections of long-term product pricing. Pre-tax discount rates used ranged from 9.60% to 10.30% (2021 - 11.30% to 13.10%).

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The estimated recoverable amounts of the CGU groups exceeded their respective carrying amounts and as such, no impairment losses were recognized for the year ended December 31, 2022 (2021 - nil).

9.	Other assets
****As at	Note		December 31,2022		December 31,2021
---	---	---	---	---	---	---
Retirement assets		13	$	132	$	27
Interest rate swap contracts		12		12		—
Other				31		31
			$	175	$	58
10.	Payables and accrued liabilities
---	---
As at	Note		December 31,<br><br><br>2022		December 31,2021
---	---	---	---	---	---	---
Trade accounts			$	359	$	411
Accruals on capital spending				45		52
Customer rebates accruals				27		51
Equity-based compensation		15		45		69
Compensation				152		172
Export duties		26		4		11
Dividends				25		21
Interest				5		4
Current portion of lease obligations				11		11
Accrued sales and city taxes				19		26
Other				30		20
			$	722	$	848
11.	Other liabilities
---	---
As at	Note	December 31,<br><br><br>2022		December 31,<br><br><br>2021
---	---	---	---	---	---
Retirement liabilities	13	$	77	$	168
Long-term portion of reforestation			55		59
Long-term portion of decommissioning			15		25
Long-term portion of lease obligations			26		18
Export duties	26		73		69
Electricity swaps	23		4		—
Interest rate swap contracts	12		—		1
Other			18		20
		$	268	$	360

Reforestation and decommissioning obligations

Reforestation and decommissioning obligations relate to our responsibility for reforestation under various timber licences and our obligations related to landfill closure and other site remediation costs.

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Accounting policies

Reforestation obligations are measured at the present value of the expenditures expected to be required to settle the obligations and are accrued and charged to earnings when timber is harvested. The reforestation obligation is accreted over time through charges to finance expense and reduced by silviculture expenditures. Changes to estimates are credited or charged to earnings.

We record a liability for decommissioning obligations in the period a reasonable estimate can be made. The liability is determined using estimated closure and/or remediation costs and discounted using an appropriate discount rate. On initial recognition, the carrying value of the liability is added to the carrying amount of the associated asset and amortized over its useful life or expensed when there is no related asset. The liability is accreted over time through charges to finance expense and reduced by actual costs of settlement. Changes to estimates result in an adjustment of the carrying amount of the associated asset or, where there is no asset, they are credited or charged to earnings.

Reforestation and decommissioning obligations are discounted at the risk-free rate at the balance sheet date.

Supporting information

			Reforestation						Decommissioning
	Note		2022			2021			2022			2021
Beginning of year			$	97		$	88		$	33		$	28
Norbord Acquisition		3		—			5			—			—
Liabilities recognized				51			53			5			5
Liabilities settled				(49	)		(49	)		(1	)		(1	)
Foreign exchange				(6	)		—			(2	)		1
End of year				93			97			35			33
Less: current portion				(38	)		(38	)		(20	)		(8	)
			$	55		$	59		$	15		$	25

The total undiscounted amount of the estimated cash flows required to satisfy these obligations is $159 million (December 31, 2021

$133 million). The cash flows have been discounted using interest rates ranging from 3.27% to 5.51% (2021 - 0.95% to 1.25%).

The timing of the reforestation payments is based on the estimated period required to ensure the associated areas are well established and attain free to grow status, which is generally between 12 to 15 years. Payments relating to landfill closures and site remediation are expected to occur over periods ranging up to 50 years.

12.	Operating loans and long-term debt

Accounting policies

Transaction costs related to debt financing or refinancing are deferred and amortized over the life of the associated debt. When our operating loan is undrawn, the related deferred financing costs are recorded in other assets.

Supporting information

Operating loans

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Offered Rate (“LIBOR”) Advances at our option. Our $1 billion committed revolving credit facility contains transition provisions relating to the elimination of LIBOR whereby Secured Overnight Financing Rate (“SOFR”) can be elected by mutual consent with the lenders.

All debt is unsecured except the $10 million (CAD$13 million) jointly-owned newsprint operation demand line of credit, which is secured by that joint operation’s current assets.

As at December 31, 2022, we were in compliance with the requirements of our credit facilities.

Long-term debt

As at	December 31,<br><br><br>2022			December 31,<br><br><br>2021
Senior notes due October 2024; interest at 4.35%	$	300		$	300
Term loan due August 2024; floating interest rate		200			200
Notes payable		—			1
		500			501
Less: deferred financing costs		(1	)		(2	)
Less: current portion		—			—
	$	499		$	499

As part of the Norbord Acquisition, we assumed Norbord’s $315 million senior notes due April 2023 (the “2023 Notes”), bearing interest at 6.25% and $350 million senior notes due July 2027 (the “2027 Notes”), bearing interest at 5.75%. The purchase price fair value adjustment resulted in an increase of $55 million for these notes. On March 2, 2021, we made a mandatory change of control offer for 2023 Notes and 2027 Notes, which expired on April 1, 2021. As a result of the change of control offer, $1 million of the 2023 Notes and $1 million of the 2027 Notes were redeemed and were repaid in the second quarter of 2021. On April 6, 2021, we elected to redeem the remaining 2027 Notes, which redemption occurred on May 6, 2021. On May 6, 2021, we elected to redeem the remaining 2023 Notes, which redemption occurred on June 7, 2021. After the completion of the redemptions of the 2023 Notes and the 2027 Notes, the principal value of long-term debt was reduced by $665 million from the date of the Norbord Acquisition. An additional make-whole premium of $60 million was paid on redemption resulting in a $5 million loss on settlement of the debt recorded within finance expense as the carrying value of $720 million was derecognized.

Required principal repayments are disclosed in note 23.

Interest rate swapcontracts

At December 31, 2022, we had interest rate swap contracts to pay fixed interest rates (weighted average interest rate of 1.14%) and receive variable interest rates equal to 3-month LIBOR on $200 million notional principal amount of indebtedness. These interest rate swap agreements fix the interest rate on the $200 million term loan disclosed in the long-term debt table above. These agreements mature in August 2024.

The interest rate swap contracts are accounted for as a derivative, with the related changes in the fair value included in Other on the consolidated statement of earnings. For the year ended December 31, 2022, a gain of $13 million (year ended December 31, 2021 - gain of $6 million) was recognized in relation to the interest rate swap contracts. The fair value of the interest rate swap contracts at December 31, 2022 was an asset of $12 million (December 31, 2021 - liability of $1 million).

13.	Retirement benefits

We maintain defined benefit and defined contribution pension plans covering most of our employees. The defined benefit plans generally do not require employee contributions and provide a guaranteed level of pension payable for life based either on length of service or on earnings and length of service, and in most cases do not increase after

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commencement of retirement. We also provide group life insurance, medical and extended health benefits to certain employee groups.

The defined benefit pension plans are operated in Canada, the U.S., and Europe under broadly similar regulatory frameworks. The majority are funded arrangements where benefit payments are made from plan assets that are held in trust. Responsibility for the governance of certain of the plans, including investment and contribution decisions, resides with our Retirement Committees, Human Resources & Compensation Committee of the Board of Directors, and the Board of Directors. For the registered defined benefit pension plans, regulations set minimum requirements for contributions for benefit accruals and the funding of deficits.

Starting January 1, 2022, defined benefit pension plans for certain employee groups were closed to new entrants and were replaced by defined contribution plans.

Accounting policies

We record a retirement asset or liability for our employee defined benefit pension and other retirement benefit plans by netting our plan assets with our plan obligations, on a plan-by-plan basis.

The cost of defined benefit pensions and other retirement benefits earned by employees is actuarially determined using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using market yields from high quality corporate bonds with cash flows that approximate expected benefit payments at the balance sheet date. Plan assets are valued at fair value at each balance sheet date.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity through other comprehensive earnings in the period in which they arise.

Past service costs arising from plan amendments are recognized immediately. The finance amount on net retirement balances is classified as finance expense.

A gain or loss on settlement is recognized in earnings, calculated as the difference between the present value of the defined benefit obligation being settled, as determined on the date of settlement, and the settlement amount.

For defined contribution plans, pension expense is the amount of contributions we are required to make in respect of services rendered by employees.

Supporting information

The actual return on plan assets for 2022 was a loss of $138 million (2021 - gain of $132 million). The total pension expense for the defined benefit pension plans was $71 million (2021 - $89 million). In 2022, we made contributions to our defined benefit pension plans of $39 million (2021 - $46 million). We expect to make cash contributions of approximately $36 million to our defined benefit pension plans during 2023 based on the most recent valuation report for each pension plan. We also provide group life insurance, medical and extended health benefits to certain employee groups, for which we contributed $1 million in 2022 (2021 - $1 million).

In 2022, we entered into buy-out annuity purchase agreements to settle $82 million (2021 - $215 million) of our defined benefit obligations by purchasing annuities using our plan assets. These agreements transferred the pension obligations of retired employees under certain pension plans to financial institutions. The difference between the cost of the annuity purchase and the liabilities held for these pension plans was reflected as a settlement cost in other income (expense).

In 2022, as part of the process related to the annuitization of our U.K. defined benefit pension plan, we entered into a $15 million (£13 million) investment contract with an insurer. Future cash inflows from the investment contract will match the cash flows of the outgoing benefit payments made by the pension plan, substantially mitigating the exposure to future volatility in the related pension obligations. We plan to complete the buy-out of the defined benefit obligations upon completion of certain normal-course administrative processes.

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The status of the defined benefit pension plans and other retirement benefit plans, in aggregate, is as follows:

	Defined benefit						Other retirement
	pension plans						benefit plans
	2022			2021			2022			2021
Accrued benefit obligations
Benefit obligations - opening	$	1,355		$	1,443		$	23		$	28
Norbord Acquisition (note 3)		—			165			—			1
Service cost		59			68			—			—
Finance cost on obligation		41			43			1			1
Benefits paid		(56	)		(54	)		(1	)		(1	)
Actuarial (gain) loss due to change in financial assumptions		(408	)		(101	)		(4	)		(2	)
Actuarial (gain) loss due to demography/experience		3			(2	)		—			(4	)
Settlement		(82	)		(215	)		—			—
Foreign exchange^1^		(74	)		8			(1	)		—
Benefit obligations - ending	$	838		$	1,355		$	18		$	23
Plan assets
Plan assets - opening	$	1,239		$	1,181		$	—		$	—
Norbord Acquisition (note 3)		—			155			—			—
Finance income on plan assets		36			36			—			—
Actual return on plan assets, net of finance income		(174	)		96			—			—
Employer contributions		39			46			1			1
Benefits paid		(56	)		(54	)		(1	)		(1	)
Settlement		(87	)		(227	)		—			—
Other		(2	)		(3	)		—			—
Foreign exchange^1^		(68	)		9			—			—
Plan assets - ending	$	927		$	1,239		$	—		$	—
Funded status^2^
Retirement assets	$	148		$	29		$	—		$	—
Impact of asset ceiling adjustments^3^		(16	)		(2	)		—			—
Retirement assets (note 9)	$	132		$	27		$	—		$	—
Retirement liabilities (note 11)		(59	)		(145	)		(18	)		(23	)
	$	73		$	(118	)	$	(18	)	$	(23	)
1.	Foreign currency translation relates to the foreign exchange impact of translating assets and liabilities of certain plans<br>to U.S. dollars.
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2.	Plans in a surplus position are presented as assets and plans in a deficit position are presented as liabilities on the<br>consolidated balance sheets. Other retirement benefit plans continue to be unfunded.
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3.	Certain of our plans have a surplus that is not recognized on the basis that future economic benefits may not be available<br>to us in the form of a reduction in future contributions or a cash refund.
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	Defined benefit<br><br><br>pension plans				Other retirement<br><br><br>benefit plans
---	---	---	---	---	---	---	---	---
	2022		2021		2022		2021
Expense
Service cost	$	59	$	68	$	—	$	—
Administration fees		3		2		—		—
Settlement		5		12		—		—
Net finance expense		4		7		1		1
	$	71	$	89	$	1	$	1

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Assumptions and sensitivities

At December 31, 2022, the weighted average duration of the defined benefit pension obligations is 17 years (December 31, 2021 - 20 years). The projected future benefit payments for the defined benefit pension plans at December 31, 2022 are as follows:

	2023		2024		2025 to 2027		Thereafter		Total
Defined benefit pension plans	$	37	$	33	$	111	$	1,878	$	2,059

Key assumptions used in determining defined benefit pension and other retirement pension benefit obligations include assumed rates of increase for future employee compensation and discount rates. These estimates are determined with the assistance of independent actuarial specialists.

The significant actuarial assumptions used to determine our balance sheet date retirement assets and liabilities and our retirement benefit plan expenses are as follows:

	Defined benefit<br><br><br>pension plans				Other retirement<br><br><br>benefit plans
	2022		2021		2022		2021
Benefit obligations:
Discount rate		5.17%		3.03%		5.10%		3.08%
Future compensation rate increase		3.53%		3.60%		n/a		n/a
Benefit expense:
Discount rate - beginning of year		3.03%		2.69%		3.08%		2.70%
Future compensation rate increase		3.60%		3.65%		n/a		n/a

Health-care benefit costs, shown under other retirement benefit plans, are funded on a pay-as-you-go basis.

The impact of a change in these assumptions on our retirement obligations as at December 31, 2022 is as follows:

	Increase		Decrease
Discount rate - 0.50% change	$	(72)	$	72
Compensation rate - 0.50% change	$	19	$	(19)

The sensitivities have been calculated on the basis that all other variables remain constant. When calculating the sensitivity of the defined benefit obligation, the same methodology is applied as was used to determine the retirement assets and liabilities.

Plan Assets

The assets of the defined benefit pension plans are invested predominantly in a diversified range of equities, pooled funds and bonds. The weighted average asset allocations of the defined benefit plans at December 31, by asset category, are as follows:

	Target range	2022	2021
Canadian equities	2% - 30%	26%	16%
Foreign equities	15% - 57%	30%	39%
Fixed income investments	20% - 55%	30%	33%
Other investments	0% - 34%	14%	12%
		100%	100%

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Risk management practices

We are exposed to various risks related to our defined benefit pension and other retirement benefit plans:

·	Uncertainty in benefit payments: The value of the liability for retirement benefits will ultimately depend on the amount of benefits paid and this in turn will depend on the level of future compensation increase and<br>life expectancy.
·	Volatility in asset value: We are exposed to changes in the market value of pension plan investments which are required to fund future benefit payments.
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·	Uncertainty in cash funding: Movement in the value of the assets and obligations may result in increased levels of cash funding, although changes in the level of cash funding required can be spread over several years.<br>We are also exposed to changes in pension regulation and legislation.
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Our Retirement Committees manage these risks in accordance with a Statement of Investment Policies and Procedures for each pension plan or group of plans administered under master trust agreements. The following are some specific risk management practices employed:

·	Retaining and monitoring professional advisors including an outsourced chief investment officer (“OCIO”).
·	Monitoring our OCIO’s adherence to asset allocation guidelines and permitted categories of investments.
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·	Monitoring investment decisions and performance of the OCIO and asset performance against benchmarks.
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Definedcontribution plans

The total pension expense and funding contributions for the defined contribution pension plans for 2022 was $36 million (2021 - $29 million).

14.	Share capital

Authorized

400,000,000 Common shares, without par value

20,000,000 Class B Common shares, without par value

10,000,000 Preferred shares, issuable in series, without par value

Issued

	December 31, 2022				December 31, 2021
	Number		Amount		Number		Amount
Common		81,273,936	$	2,667		103,647,256	$	3,402
Class B Common		2,281,478		—		2,281,478		—
Total Common		83,555,414	$	2,667		105,928,734	$	3,402

For the year ended December 31, 2022, we issued no Common shares under our share option plans (2021 - 131,452 Common shares) and no Common shares under our employee share purchase plan (2021 - 2,946 Common shares).

Rights and restrictions of Common shares

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Share repurchases

Normal Course Issuer Bid ****

For the year ended December 31, 2022, we repurchased 10,475,115 Common shares at an average price of $82.01 per share under our NCIB programs (year ended December 31, 2021 - 7,059,196 Common shares at an average price of $74.60).

2022 Substantial Issuer Bid

On June 7, 2022, we completed a substantial issuer bid (“2022 SIB”) pursuant to which we purchased for cancellation a total of 11,898,205 Common shares at a price of $95.00 per share for an aggregate purchase price of $1.13 billion.

2021 Substantial Issuer Bid

On August 20, 2021, we completed a substantial issuer bid (“2021 SIB”) pursuant to which we purchased for cancellation a total of 10,309,278 Common shares at a price of CAD$97.00 (US$76.84) per Common share for an aggregate purchase price of CAD$1.0 billion.

15.	Equity-based compensation

We have share option, phantom share unit (“PSU”) and directors’ deferred share unit (“DSU”) plans. The equity-based compensation expense included in the consolidated statement of earnings for the year ended December 31, 2022 was $5 million (2021 - $40 million).

Accounting policies

We estimate the fair value of outstanding share options using the Black-Scholes option-pricing model and the fair value of our PSU plan and directors’ DSU plan using an intrinsic valuation model at each balance sheet date. We record the resulting expense or recovery, over the related vesting period, through a charge or recovery to earnings.

Equity derivative contracts are sometimes used to provide a partial offset to our exposure to fluctuations in equity-based compensation from our stock option, PSU and DSU plans. These derivatives are fair valued at each balance sheet date using an intrinsic valuation model and the resulting expense or recovery is offset against the related equity-based compensation.

If a share option holder elects to acquire Common shares, both the exercise price and the accrued liability are credited to shareholders’ equity.

Supporting information

Share option plan

Under our share option plan, officers and employees may be granted options to purchase up to 8,295,940 Common shares, of which 910,424 remain available for issuance.

Our share option plans include equity-based plans assumed from Norbord as part of the Norbord Acquisition. The assumed Norbord share purchase option plans (“Assumed Option Plans”) were fair valued at the Norbord Acquisition date. From February 1 to April 20, 2021, the Assumed Option Plans were accounted for as equity-settled plans. On April 20, 2021, our Board of Directors approved a change to allow the Assumed Option Plans holders the right to elect to receive a cash payment in lieu of exercising an option to purchase Common shares. The change required us to fair value the Assumed Option Plan on April 20, 2021 and convert from equity-settled accounting to cash-settled accounting for the Assumed Option Plans. Cash-settled accounting is consistent with the West Fraser option plan. Any changes in fair value from April 20, 2021 onwards resulted in an expense or recovery over the vesting period in the same manner as the rest of

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our option plans. This change to the Assumed Option Plans did not in any way affect the value of the instruments to the holders. No additional options may be offered under the Assumed Option Plans.

The exercise price of a share option is determined in accordance with the plan and is generally the closing price of a Common share on the trading day immediately preceding the grant date. Our share option plans give the share option holders the right to elect to receive a cash payment in lieu of exercising an option to purchase Common shares. Options vest at 20% per year from the grant date and expire after 10 years.

In 2022, we have recorded a recovery of $4 million (2021 – expense of $47 million) related to the share option plans. The liability associated with the share option plan is tracked in Canadian dollars and is based on prices published by the TSX. A summary of the activity in the share option plans based on Canadian dollar prices is presented below:

	2022				2021
	Number			Weighted average price	Number			Weightedaverage price
				(CAD)				(CAD)
Outstanding - beginning of year		1,077,840				1,316,994
Assumed in Norbord Acquisition (note<br>3)		—				887,961
Granted		124,566				171,975
Exercised		(351,448	)			(1,284,284	)
Expired / Cancelled		(9,653	)			(14,806	)
Outstanding - end of year		841,305				1,077,840
Exercisable - end of year		408,115				563,102

All values are in US Dollars.

The following table summarizes information about the share options outstanding and exercisable at December 31, 2022 in Canadian dollars:

Exercise price range		Weighted averageremainingcontractual life	Weighted averageexercise price	Number ofexercisable options		Weighted averageexercise price
(CAD)		(years)	(CAD)	(number)		(CAD)
38.95 - 56.00	243,412	4.4			190,087
64.50 - 73.99	284,745	6.0			149,270
85.40 - 92.79	193,467	7.3			68,758
123.63	119,681	9.1			—
	841,305	6.3			408,115

All values are in US Dollars.

The weighted average share price at the date of exercise for share options exercised during the year was CAD$120.95 per share (2021 - CAD$100.85 per share).

The accrued liability related to the share option plan based on the Black-Scholes option-pricing model was $23 million at December 31, 2022 (December 31, 2021 - $44 million). The weighted average fair value of the options used in the calculation was CAD$35.59 per option at December 31, 2022 (December 31, 2021 - CAD$52.29 per option).

The inputs to the option model are as follows:


Weighted-average share price on balance sheet date	CAD98.20	CAD$120.68
Weighted average exercise price	CAD76.19	CAD$66.64
Expected dividend	CAD1.63	CAD$1.01
Expected volatility	45.15%	42.94%
Weighted average interest rate	3.77%	1.11%
Weighted average expected remaining<br>life in years	4.14	6.44

All values are in US Dollars.

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The expected dividend on our shares was based on the annualized dividend rate at each period-end. Expected volatility was based on five years of historical data. The interest rate for the life of the options was based on the implied yield available on government bonds with an equivalent remaining term at each period-end. Historical data was used to estimate the expected life of the options and forfeiture rates.

The intrinsic value of options issued under the share option plans at December 31, 2022 was CAD$14 million (December 31, 2021 - CAD$33 million). The intrinsic value is determined based on the difference between the weighted-average share price on the last business day of the month and the exercise price, multiplied by the sum of the related vested options.

Phantom share unit plan

Our PSU plan is intended to supplement, in whole or in part, or replace the granting of share options as long-term incentives for officers and employees. The plan provides for two types of units which vest on the third anniversary of the grant date. A restricted share unit pays out based on the volume weighted average price per Common share on the trading day immediately preceding its vesting date (the “vesting date value”). A performance share unit pays out at a value between 0% and 200% of its vesting date value contingent upon our performance relative to a peer group of companies over the three-year performance period. Officers and employees granted units under the plan are also entitled to additional units to reflect cash dividends paid on Common shares from the applicable grant date until payout.

We have recorded an expense of $10 million (2021 - expense of $11 million) related to the PSU plan. The number of units outstanding as at December 31, 2022 was 184,207 (December 31, 2021 – 169,385), including performance share units totalling 167,156 (December 31, 2021 – 90,813).

Directors’ deferred share unit plans

We have DSU plans which provides a structure for directors, who are not employees of the Company, to accumulate an equity-like holding in West Fraser. The DSU plans allow directors to participate in the growth of West Fraser by providing a deferred payment based on market pricing of our Common shares at the time of redemption. Each director receives deferred share units in payment of an annual equity retainer until a minimum equity holding is reached and may elect to receive units in payment of up to 100% of other fees earned. After a minimum equity holding is reached, directors may elect to receive the equity retainer in units or cash. The units are issued based on the market price of our Common shares at the time of issue. Additional units are issued to take into account the value of dividends paid on Common shares from the date of issue to the date of redemption. Units are redeemable only after a director retires, resigns or otherwise leaves the board. The redemption value is equal to the market price of our Common shares at the date of redemption. A holder of units may elect to redeem units in cash or receive Common shares having an equivalent value.

We have recorded a recovery of $1 million (2021 - expense of $5 million) related to the DSU plan. The number of units outstanding as at December 31, 2022 was 97,884 (December 31, 2021 - 92,120).

Equity-based compensation hedge

In 2021, we were party to an equity derivative contract providing an offset for 1,000,000 Common share equivalents against our exposure to fluctuations in equity-based compensation expense from our stock option, PSU and DSU plans. The equity derivative contract matured in December 2021 and was closed out. A recovery of $23 million was included in equity-based compensation expense related to our equity derivative contract for the year ended December 31, 2021.

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16.	Restructuring and impairment charges

During the quarter ended March 31, 2022, management approved a plan to permanently reduce the capacity at our pulp mill in Hinton, Alberta. One of Hinton pulp mill’s two production lines has shut, and the remaining line produces Unbleached Kraft Pulp rather than Northern Bleached Softwood Kraft Pulp. As a result, we recorded impairment charges of $13 million relating to equipment that was decommissioned permanently as part of the transition to Unbleached Kraft Pulp.

During the quarter ended December 31, 2022, we identified an impairment indicator for our Perry sawmill as a result of high fibre costs and softening lumber markets. We recorded associated restructuring and impairment charges of $31 million, of which $29 million related to asset impairment of manufacturing plant, equipment and machinery. On January 10, 2023, we announced the indefinite curtailment of our Perry sawmill.

During the quarter ended December 31, 2022, we identified an impairment indicator for our South Molton, England location due to a decline in demand from a key customer for our kitchen cabinet products. We recorded associated restructuring and impairment charges of $15 million, of which $9 million related to asset impairment of manufacturing plant, equipment and machinery and related spares.

We recorded restructuring and impairment charges of $60 million for the year ended December 31, 2022 as follows:

	2022			2021
Severance	$	7		$	—
Other		2			—
Restructuring charges	$	9		$	—
Asset impairment related to Hinton pulp mill	$	13		$	—
Asset impairment related to Perry lumber mill	$	29		$	—
Asset impairment related to South Molton<br>mill	$	9		$	—
Total restructuring and impairment<br>charges	$	60		$	—
17. Finance expense, net
	2022			2021
Interest expense	$	(24	)	$	(48	)
Interest income on cash equivalents		18			2
Net interest income on export duty deposits		9			9
Finance expense on employee future<br>benefits		(6	)		(8	)
	$	(3	)	$	(45	)
18. Other
	2022			2021
Foreign exchange gain (loss)	$	28		$	(5	)
Settlement loss on defined benefit pension plan annuity purchase		(5	)		(12	)
Gain on interest rate swap contracts		13			6
Other		1			9
	$	37		$	(2	)

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19.	Tax provision

Accounting policies

Tax expense for the year is comprised of current and deferred tax. Tax expense is recognized in the consolidated statement of earnings, except to the extent that it relates to items recognized in other comprehensive earnings in which case it is recognized in other comprehensive earnings.

Deferred taxes are provided for using the liability method. Under this method, deferred taxes are recognized for temporary differences between the tax and financial statement basis of assets, liabilities and certain carry-forward items.

Deferred tax assets are recognized only to the extent that it is probable that they will be realized. Deferred income tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of substantive enactment.

Supporting information

The major components of income tax included in comprehensive earnings are as follows:

	2022		2021
Earnings:
Current tax	$	(581)	$	(977)
Deferred tax (provision) recovery		(37)		26
Tax provision on earnings	$	(618)	$	(951)
Other comprehensive earnings:
Deferred tax provision on retirement<br>benefit actuarial gain	$	(56)	$	(52)
Tax provision on comprehensiveearnings	$	(674)	$	(1,003)

The tax provision differs from the amount that would have resulted from applying the British Columbia statutory income tax rate to earnings before tax as follows:

	2022		2021
Income tax expense at statutory rate of 27%	$	(700)	$	(1,052)
Non-taxable amounts		81		(4)
Rate differentials between jurisdictions and on specified<br>activities		10		116
Other		(9)		(11)
Tax provision	$	(618)	$	(951)

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Deferred income tax liabilities (assets) are made up of the following components:

	2022			2021
Property, plant, equipment and intangibles	$	783		$	781
Reforestation and decommissioning obligations		(30	)		(30	)
Employee benefits		(12	)		(64	)
Export duty deposits		72			44
Tax loss<br>carry-forwards^1^		(11	)		(10	)
Other		(11	)		(17	)
	$	791		$	704
Represented by:
Deferred income tax assets	$	(4	)	$	(8	)
Deferred income tax liabilities		795			712
	$	791		$	704
1.	Includes $61 million for net operating loss carry-forwards in various jurisdictions (December 31, 2021 - $68 million)<br>and $345 million for U.S. state net operating loss carry-forwards (December 31, 2021 - $409 million). A portion of these losses expire over various periods starting in 2023. The net operating losses that have not been recognized as of<br>December 31, 2022 are $35 million in various jurisdictions (December 31, 2021 - $53 million) and $272 million for U.S. states (December 31, 2021 - $287 million).
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20.	Employee compensation
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Our employee compensation expense includes salaries and wages, employee future benefits, bonuses and termination costs, but excludes restructuring charges. Total compensation expense is $1,133 million (2021 - $1,070 million).

Key management includes directors and officers, and their compensation expense and balance sheet date payables are as follows:

	2022		2021
Expense
Salary and short-term employee benefits	$	13	$	17
Retirement benefits		2		2
Equity-based compensation^1^		4		36
	$	19	$	55
1. Amounts do not necessarily represent the actual value which will ultimately be<br>paid.
	2022		2021
Payables and accrued liabilities
Compensation	$	6	$	7
Equity-based compensation^1^		35		46
	$	41	$	53
1.	Amounts do not necessarily represent the actual value which will ultimately be paid.
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21.	Earnings per share
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Basic earnings per share is calculated based on earnings available to Common shareholders, as set out below, using the weighted average number of Common shares and Class B Common shares outstanding.

Certain of our equity-based compensation plans may be settled in cash or Common shares at the holder’s option and for the purposes of calculating diluted earnings per share, the more dilutive of the cash-settled and equity-settled method is used, regardless of how the plan is accounted for. Plans that are accounted for using the cash-settled method will require adjustments to the numerator and denominator if the equity-settled method is determined to have a dilutive effect as compared to the cash-settled method.

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The numerator under the equity-settled method is calculated based on earnings available to Common shareholders adjusted to remove the cash-settled equity-based compensation expense (recovery) charged to earnings and deducting a notional charge using the equity-settled method, as set out below. Adjustments to earnings are tax-effected as applicable. The denominator under the equity-settled method is calculated using the treasury stock method. Share options under the equity-settled method are considered dilutive when the average market price of our Common shares for the period exceeds the exercise price of the share option.

The equity-settled method was more dilutive for the year ended December 31, 2022 and an adjustment was required for both the numerator and denominator. The cash-settled method was more dilutive for the year ended December 31, 2021.

A reconciliation of the numerator and denominator used for the purposes of calculating diluted earnings per share is as follows:

	2022			2021
Earnings
Numerator for basic EPS	$	1,975		$	2,947
Cash-settled recovery included in earnings		(5	)		—
Equity-settled expense adjustment		(5	)		—
Numerator for diluted EPS	$	1,965		$	2,947
Weighted average number of shares (thousands)
Denominator for basic EPS		93,760			109,021
Effect of dilutive equity-based compensation		413			—
Denominator for diluted EPS		94,173			109,021
Earnings per share (dollars)
Basic	$	21.06		$	27.03
Diluted	$	20.86		$	27.03
22.	Government assistance
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Accounting policies

Government assistance received that relates to the construction of manufacturing assets is applied to reduce the cost of those assets. Government assistance received that relates to operational expenses is applied to reduce the amount charged to earnings for the operating item. Government assistance is recognized when there is reasonable assurance that the amount will be collected and that all the conditions will be complied with.

Supporting information

Government assistance of nil (2021 - $5 million) was recorded as a reduction to property, plant and equipment and $9 million (2021 - $8 million) was recorded as a reduction to cost of products sold. The government assistance related primarily to research and development, apprenticeship tax credits, and renewable heat incentives.

23.	Financial instruments

Accounting policies

All financial assets and liabilities, except for derivatives, are initially measured at fair value and subsequently measured at amortized cost using the effective interest rate method. Derivatives are measured at fair value through profit or loss (“FVTPL”).

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Supporting information

The following tables provide the carrying values and fair values of our financial instruments by category, as well as the associated fair value hierarchy levels as defined in note 2 under “Fair value measurements”. The carrying value is a reasonable approximation of fair value for cash and cash equivalents, receivables, and payables and accrued liabilities due to their short-term nature. The carrying values of long-term debt include any current portions and exclude deferred financing costs.

December 31, 2022	Level		Financial assetsat amortizedcost		Financial assetsor financialliabilities atFVTPL		Financialliabilities atamortized cost		Carrying value		Fair value
Financial assets
Cash and cash equivalents		2	$	1,162	$	—	$	—	$	1,162	$	1,162
Receivables		3		350		—		—		350		350
Interest rate swaps (note 9 & 12)^2^		2	$	—	$	12	$	—	$	12	$	12
			$	1,512	$	12	$	—	$	1,524	$	1,524
Financial liabilities
Payables and accrued liabilities		3	$	—	$	—	$	722	$	722	$	722
Long-term debt<br>(note 12)^1^		2		—		—		500		500		491
Electricity swaps (note 11)		3		—		4		—		4		4
			$	—	$	4	$	1,222	$	1,226	$	1,217
1.	The fair value of long-term debt is based on rates available to us at December 31, 2022 for long-term debt with<br>similar terms and remaining maturities.
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2.	The interest rate swap contracts are included in other assets in our consolidated balance sheets.
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December 31, 2021	Level		Financial assetsat amortizedcost		Financial assetsor financialliabilities atFVTPL		Financialliabilities atamortized cost		Carrying value		Fair value
---	---	---	---	---	---	---	---	---	---	---	---	---
Financial assets
Cash and cash equivalents		2	$	1,568	$	—	$	—	$	1,568	$	1,568
Receivables		3		508		—		—		508		508
			$	2,076	$	—	$	—	$	2,076	$	2,076
Financial liabilities
Payables and accrued liabilities		3	$	—	$	—	$	848	$	848	$	848
Long-term debt (note 12)1		2		—		—		501		501		513
Interest rate swaps (note 9 & 12)^2^		2		—		1		—		1		1
			$	—	$	1	$	1,349	$	1,350	$	1,362
1.	The fair value of long-term debt is based on rates available to us at December 31, 2021 for long-term debt with<br>similar terms and remaining maturities.
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2.	The interest rate swap contracts are included in other liabilities in our consolidated balance sheets.<br>
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Financial risk management

Our activities result in exposure to a variety of financial risks, and the main objectives of our risk management process are to ensure risks are properly identified and analyzed and establish appropriate risk limits and controls. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and our activities. We are exposed to credit risk, liquidity risk and market risk. A description of these risks and policies for managing these risks are summarized below.

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100

The sensitivities provided in this section give the effect of possible changes in the relevant prices and rates on earnings. The sensitivities are hypothetical and should not be considered to be predictive of future performance or earnings. Changes in fair values or cash flows based on market variable fluctuations cannot be extrapolated since the relationship between the change in the market variable and the change in fair value or cash flows may not be linear.

Credit risk

Credit risk is the risk of financial loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. We are exposed to credit risk with respect to cash and cash equivalents and accounts receivable from our customers. The carrying amounts of these accounts represent the maximum credit exposure. We manage credit risk by holding cash and cash equivalents with major banks of high creditworthiness. Credit risk for trade and other receivables is managed through established credit monitoring activities such as:

·	Establishing and monitoring customer credit limits;
·	Performing ongoing evaluations of the financial conditions of key customers; and
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·	In certain market areas, undertaking additional measures to reduce credit risk including credit insurance, letters of credit and prepayments. At December 31, 2022, approximately 45% of trade accounts receivable was<br>covered by at least some of these additional measures (December 31, 2021 - 35%).
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Given our credit monitoring activities, the low percentage of overdue accounts and our history of minimal customer defaults, we consider the credit quality of the trade accounts receivable at December 31, 2022 to be high and have recorded nominal expected credit losses on our trade accounts receivable. The aging analysis of trade accounts receivable is presented below:

As at	December31, 2022		December31, 2021
Trade accounts receivable
Current	$	256	$	403
Past due 1 to 30 days		19		30
Past due 31 to 60 days		9		3
Past due over 60 days		2		5
Trade accounts receivable	$	286	$	441
Insurance receivable		3		6
Government assistance		—		1
Sales taxes receivable		22		28
Other		39		32
Receivables	$	350	$	508

Liquidity risk

Liquidity risk is the risk we will encounter difficulty in meeting obligations associated with financial liabilities. We manage liquidity risk by maintaining adequate cash and cash equivalents balances and having lines of credit available. In addition, we regularly monitor forecasted and actual cash flows. Refinancing risks are managed by extending maturities through regular renewals and refinancing when market conditions are supportive.

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The following table summarizes the maturity profile of our financial liabilities based on contractual undiscounted payments:

December 31, 2022	Carryingvalue		Total		2023			2024			2025			2026		Thereafter
Long-term debt	$	499	$	500	$	—		$	500		$	—		$	—	$	—
Interest on long-term debt^1^		—		33		19			14			—			—		—
Lease obligations		37		42		12			8			7			3		12
Payables and accrued liabilities		722		722		722			—			—			—		—
Electricity swaps		4	$	7	$	(1	)	$	(2	)	$	(1	)	$	1	$	10
Total	$	1,262	$	1,304	$	752		$	520		$	6		$	4	$	22
1.	Assumes debt remains at December 31, 2022 levels and includes the impact of interest rate swaps terminating August<br>2024.
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In addition, we have contractual commitments for the acquisition of of property, plant and equipment in the amount of $278 million in 2023.

Market risk

Market risk is the risk of loss that might arise from changes in market factors such as interest rates, foreign exchange rates, commodity, and energy prices. We aim to manage market risk within acceptable parameters and may, from time to time, use derivatives to manage market risk.

Interest rates ****

Interest rate risk relates mainly to floating interest rate debt. By maintaining a mix of fixed and floating rate debt along with interest rate swap contracts, we mitigate the exposure to interest rate changes.

As at December 31, 2022, we had the following floating rate financial instruments:

Financial instrument	Carrying<br><br><br>value
Financial liability: Term loan	$	200
Financial asset: Interest rate swap<br>contracts	$	12

We maintain a $200 million five-year term loan due August 2024 where the interest is payable at floating rates based on Prime, Base Rate Advances, Bankers’ Acceptances or LIBOR Advances at our option.

We have interest rate swap agreements terminating August 2024 to pay fixed interest rates and receive variable interest rates equal to 3-month LIBOR on $200 million notional principal amount of indebtedness. These swap agreements fix the interest rate on the $200 million five-year term loan floating rate debt.

In addition, interest on certain of our credit facilities is payable at floating rates including LIBOR at our option.

At December 31, 2022, the impact of a 100-basis point change in interest rate affecting our floating rate debt would not result in a change in annual interest expense (December 31, 2021 - no change).

We adopted Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS39, IFRS 7, IFRS 4 and IFRS 16) (“The Phase 2 Amendments”) effective January 1, 2021. The Phase 2 Amendments provide practical relief from certain requirements in IFRS Standards relating to the modification of financial instruments, lease contracts, or hedging relationships triggered by a replacement of a benchmark interest rate in a contract with a new alternative benchmark rate.

At December 31, 2022, these amendments did not affect our financial statements as we have not yet transitioned any agreements that are exposed to LIBOR or to an alternative benchmark interest rate.

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102

The above financial instruments are based on LIBOR settings that are currently scheduled to cease publication after June 30, 2023. We are working with the lenders associated with the term loan and the counterparties associated with the interest rate swap to assess the potential alternatives to the use of LIBOR. We will continue to monitor developments on alternative benchmark interest rates and expect to transition to alternative rates as widespread market practice is established.

Energy

We are party to arrangements with renewable power generators to purchase environmental attributes and receive settlements by reference to generation volumes and the spot price for power and pay settlements by reference to generation volumes and a fixed contractual price. These agreements act as a partial hedge against future electricity price increases in Alberta power rates and will provide us with access to renewable energy credits that we may surrender to achieve a reduction in our greenhouse gas emissions. While these arrangements economically hedge the risk of changes in cash flows due to fluctuations in Alberta power rates, hedge accounting has not been applied to these instruments.

A contract to receive renewable energy credits and the associated floating-for-fixed electricity swap are distinct units of account. We have selected this method as we believe the receipt of the renewable energy credits is an executory contract and the electricity swap meets the definition of an embedded derivative.

The electricity swaps are valued based on a discounted cash flow model, with the related changes in fair value included in other income (expense) on the consolidated statement of earnings. The valuation requires management to make certain assumptions about the model inputs, including future electricity prices, discount rates and expected generation volumes associated with the contracts.

For the year ended December 31, 2022, a nominal gain was recognized in relation to the electricity swaps. The fair value of the electricity swaps at December 31, 2022 was a liability of $4 million.

Currency risk

We are exposed to foreign currency risk because our Canadian operations incur a portion of their operating expenses in Canadian dollars. Therefore, an increase in the value of the CAD relative to the USD increases the value of expenses in USD terms incurred by our Canadian operations, which reduces operating margin and the cash flow available to fund operations.

In addition, foreign currency exposure arises from our net investment in our European operations, which have British pound sterling and Euro functional currencies, and our Canadian newsprint operation, which has a Canadian dollar functional currency. The risk arises from the fluctuation in spot rates between these currencies and the U.S. dollar, which causes the amount of the net investment to vary with the resulting translation gains or losses being reported in other comprehensive earnings.

A $0.01 strengthening (weakening) of the USD against the CAD would increase (decrease) earnings by approximately $1 million. A $0.01 strengthening (weakening) of the USD against the CAD, British pound and Euro would result in an approximate $6 million translation loss (gain) on operations with different functional currencies included in other comprehensive earnings. These sensitivities assume that all other variables remain constant and ignores any impact of forecast sales and purchases.

24.	Capital disclosures

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Two key measurements used to monitor our capital position are total debt to total capital and net debt to total capital, calculated as follows:

As at	December 31,2022		December 31,2021
Debt
Current and long-term lease obligation	$	37	$	28
Long-term debt, excluding deferred financing costs		500		501
Interest rate swaps^1^		—		1
Open letters of<br>credit^1^		61		65
Total debt		598		595
Shareholders’ equity		7,619		7,656
Total capital		8,217		8,251
Total debt to total capital		7%		7%
Total debt		598		595
Cash and cash equivalents		(1,162)		(1,568)
Open letters of credit^1^		(61)		(65)
Interest rate<br>swaps^1^		—		(1)
Net debt	$	(625)	$	(1,039)
Shareholders’ equity	$	7,619	$	7,656
Total capital, net of cash		6,994		6,617
Net debt to total capital		(9%)		(16%)
1.	Letters of credit facilities and the fair value of interest rate swaps are part of our bank covenants’ total debt<br>calculation.
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25.	Segment and geographical information

The segmentation of manufacturing operations into lumber, NA EWP, pulp and paper and Europe EWP is based on a number of factors, including similarities in products, production processes and economic characteristics. The EWP segments have been separated due to differences in the operating region, customer base, profit margins and sales volumes. Transactions between segments are at market prices and on standard business terms. The segments follow the accounting policies described in these consolidated financial statement notes, where applicable, and earnings before tax has been identified as the measure of segment profit and loss.

Year ended December 31, 2022	Lumber			NA EWP			Pulp & Paper			Europe EWP			Corporate & Other			Total
Sales
To external customers	$	4,381		$	3,780		$	802		$	738		$	—		$	9,701
To other segments		84			9			5			—			(98	)		—
	$	4,465		$	3,789		$	807		$	738		$	(98	)	$	9,701
Cost of products sold		(2,489	)		(1,677	)		(596	)		(479	)		98			(5,142	)
Freight and other distribution costs		(435	)		(329	)		(153	)		(46	)		—			(963	)
Export duties, net		(18	)		—			—			—			—			(18	)
Amortization		(186	)		(306	)		(35	)		(53	)		(9	)		(589	)
Selling, general and administration		(194	)		(106	)		(32	)		(28	)		(5	)		(365	)
Equity-based compensation		—			—			—			—			(5	)		(5	)
Restructuring and impairment charges		(31	)		—			(13	)		(15	)		—			(60	)
Operating earnings	$	1,111		$	1,371		$	(22	)	$	117		$	(18	)	$	2,559
Finance income (expense), net		1			(4	)		(2	)		—			2			(3	)
Other income		5			16			1			—			14			37
Earnings before tax	$	1,117		$	1,383		$	(23	)	$	118		$	(2	)	$	2,593
Total assets	$	3,685		$	4,637		$	456		$	730		$	465		$	9,973
Total liabilities	$	553		$	622		$	90		$	170		$	919		$	2,354
Capital expenditures	$	184		$	235		$	29		$	20		$	9		$	477

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Year ended December 31, 2021	Lumber			NA EWP			Pulp & Paper			Europe EWP			Corporate & Other			Total
Sales
To external customers	$	4,804		$	4,264		$	727		$	723		$	—		$	10,518
To other segments		106			9			—			—			(115	)		—
	$	4,910		$	4,273		$	727		$	723		$	(115	)	$	10,518
Cost of products sold		(2,241	)		(1,521	)		(541	)		(457	)		115			(4,645	)
Freight and other distribution costs		(404	)		(262	)		(137	)		(43	)		—			(846	)
Export duties, net		(146	)		—			—			—			—			(146	)
Amortization		(164	)		(289	)		(34	)		(88	)		(9	)		(584	)
Selling, general and administration		(146	)		(76	)		(34	)		(22	)		(34	)		(312	)
Equity-based compensation		—			—			—			—			(40	)		(40	)
Operating earnings	$	1,809		$	2,125		$	(19	)	$	113		$	(83	)	$	3,945
Finance expense, net		(17	)		(3	)		(5	)		(1	)		(19	)		(45	)
Other income (expense)		2			(1	)		2			—			(5	)		(2	)
Earnings before tax	$	1,794		$	2,121		$	(22	)	$	112		$	(107	)	$	3,898
Total assets	$	3,557		$	4,154		$	448		$	953		$	1,321		$	10,433
Total liabilities	$	668		$	552		$	99		$	223		$	1,235		$	2,777
Capital expenditures	$	146		$	424		$	35		$	28		$	2		$	635

NA EWP capital expenditures for the year ended December 31, 2021 includes $276 million relating to the asset acquisition of the idled OSB mill near Allendale, South Carolina.

The geographic distribution of non-current assets and external sales based on the location of product delivery is as follows:

	Non-current assets				Sales by geographic area
	2022		2021		2022		2021
United States	$	2,625	$	2,838	$	6,659	$	7,286
Canada		4,139		3,825		1,531		1,682
U.K and Europe		460		553		733		737
Asia		—		—		767		806
Other		—		—		11		7
	$	7,224	$	7,216	$	9,701	$	10,518
26.	Countervailing (“CVD”) and antidumping (“ADD”) duty dispute
---	---

On November 25, 2016, a coalition of U.S. lumber producers petitioned the U.S. Department of Commerce (“USDOC”) and the U.S. International Trade Commission (“USITC”) to investigate alleged subsidies to Canadian softwood lumber producers and levy CVD and ADD duties against Canadian softwood lumber imports. The USDOC chose us as a “mandatory respondent” to both the countervailing and antidumping investigations, and as a result, we have received unique company-specific rates.

Accounting policy

The CVD and ADD rates apply retroactively for each period of investigation (“POI”). We record CVD as export duty expense at the cash deposit rate until an Administrative Review (“AR”) finalizes a new applicable rate for each POI. We record ADD as export duty expense by estimating the rate to be applied for each POI by using our actual results and a similar calculation methodology as the USDOC and adjust when an AR finalizes a new applicable rate for each POI. The

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difference between the cumulative cash deposits paid and cumulative export duty expense recognized for each POI is recorded on our balance sheet as export duty deposits receivable or payable.

Developments in CVD and ADD rates

On March 9, 2022, the USDOC initiated AR4 POI covering the 2021 calendar year. West Fraser was selected as a mandatory respondent, which will result in West Fraser continuing to be subject to a company-specific rate.

On August 4, 2022, the USDOC finalized the duty rate for AR3, resulting in the recording of an export duty recovery of $81 million and interest income in earnings and an increase in export duty deposits receivable.

The respective Cash Deposit Rates, the AR POI Final Rate, and the West Fraser Estimated ADD Rate for each period are as follows:

Effective dates for CVD	**<br><br><br>Cash Deposit<br><br><br>Rate**
AR1 POI^1,2^
April 28, 2017 - August 24, 2017		24.12%	6.76	%
August 25, 2017 - December 27, 2017		—%	—	%
December 28, 2017 - December 31, 2017^3^		17.99%	6.76	%
January 1, 2018 - December 31, 2018		17.99%	7.57	%
AR2 POI^4^
January 1, 2019 - December 31, 2019		17.99%	5.08	%
AR3 POI^5^
January 1, 2020 - November 30, 2020		17.99%	3.62	%
December 1, 2020 - December 31, 2020^6^		7.57%	3.62	%
AR4 POI^7^
January 1, 2021 - December 1, 2021		7.57%	n/a
December 2, 2021 - December 31, 2021^8^		5.06%	n/a
AR5 POI^9^
January 1, 2022 – January 9, 2022		5.06%	n/a
January 10, 2022 – August 8,<br>2022^10^		5.08%	n/a
August 9, 2022 - December 31, 2022^11^		3.62%	n/a
1.	On April 24, 2017, the USDOC issued its preliminary rate in the CVD investigation. The requirement that we make cash<br>deposits for CVD was suspended on August 24, 2017, until the USDOC published the revised rate.
---	---
2.	On November 24, 2020, the USDOC issued the final CVD rate for the AR1 POI.
---	---
3.	On December 4, 2017, the USDOC revised our CVD Cash Deposit Rate effective December 28, 2017.<br>
---	---
4.	On November 24, 2021, the USDOC issued the final CVD rate for the AR2 POI. On January 10, 2022, the USDOC<br>amended the final CVD rate for the AR2 POI from 5.06% to 5.08% for ministerial errors. This table only reflects the final rate.
---	---
5.	On August 4, 2022, the USDOC issued the final CVD rate for the AR3 POI.
---	---
6.	On November 24, 2020, the USDOC revised our CVD Cash Deposit Rate effective December 1, 2020.<br>
---	---
7.	The CVD rate for the AR4 POI will be adjusted when AR4 is complete and the USDOC finalizes the rate, which is not expected<br>until 2023.
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8.	On November 24, 2021, the USDOC revised our CVD Cash Deposit Rate effective December 2, 2021.<br>
9.	The CVD rate for the AR5 POI will be adjusted when AR5 is complete and the USDOC finalizes the rate, which is not expected<br>until 2024.
---	---
10.	On January 6, 2022, the USDOC revised our CVD Cash Deposit Rate effective January 10, 2022.<br>
---	---
11.	On August 4, 2022, the USDOC revised our CVD Cash Deposit Rate effective August 9, 2022.
---	---
Effective dates for ADD	Cash Deposit<br><br><br>Rate		AR POI Final<br><br><br>Rate		West Fraser<br><br><br>Estimated<br> <br>Rate
---	---	---	---	---	---	---	---
AR1 POI^1,2^
June 30, 2017 - December 3, 2017		6.76%		1.40%		1.46	%
December 4, 2017 - December 31, 2017^3^		5.57%		1.40%		1.46	%
January 1, 2018 - December 31, 2018		5.57%		1.40%		1.46	%
AR2 POI^4^
January 1, 2019 - December 31, 2019		5.57%		6.06%		4.65	%
AR3 POI^5^
January 1, 2020 - November 29, 2020		5.57%		4.63%		3.40	%
November 30, 2020 - December 31, 2020^6^		1.40%		4.63%		3.40	%
AR4 POI^7^
January 1, 2021 - December 1, 2021		1.40%		n/a		6.80	%
December 2, 2021 - December 31, 2021^8^		6.06%		n/a		6.80	%
AR5 POI^9^
January 1, 2022 - August 8, 2022		6.06%		n/a		4.52	%
August 9, 2022 - December 31, 2022^10^		4.63%		n/a		4.52	%
1.	On June 26, 2017, the USDOC issued its preliminary rate in the ADD investigation effective June 30, 2017.<br>
---	---
2.	On November 24, 2020, the USDOC issued the final ADD rate for the AR1 POI.
---	---
3.	On December 4, 2017, the USDOC revised our ADD Cash Deposit Rate effective December 4, 2017.<br>
---	---
4.	On November 24, 2021, the USDOC issued the final ADD rate for the AR2 POI.
---	---
5.	On August 4, 2022, the USDOC issued the final ADD rate for the AR3 POI.
---	---
6.	On November 24, 2020, the USDOC revised our ADD Cash Deposit Rate effective November 30, 2020.<br>
---	---
7.	The ADD rate for the AR4 POI will be adjusted when AR4 is complete and the USDOC finalizes the rate, which is not expected<br>until 2023.
---	---
8.	On November 24, 2021, the USDOC revised our ADD Cash Deposit Rate effective December 2, 2021.<br>
---	---
9.	The ADD rate for the AR5 POI will be adjusted when AR5 is complete and the USDOC finalizes the rate, which is not expected<br>until 2024.
---	---
10.	On August 4, 2022, the USDOC revised our ADD Cash Deposit Rate effective August 9, 2022.
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Impact on results

The following table reconciles our cash deposits paid during the year to the amount recorded in our statements of earnings:

($ millions)	2022			2021
Cash deposits paid^1^	$	(117	)	$	(132	)
Adjust to West Fraser Estimated ADD rate^2^		18			(69	)
Effective duty expense for period^3^		(99	)		(201	)
Duty recovery attributable to AR2^4^		—			55
Duty recovery attributable to AR3^5^		81			—
Net duty expense		(18	)		(146	)
Net interest income on duty deposits receivable	$	9		$	9
1.	Represents combined CVD and ADD cash deposit rate of 8.97% for January 1, 2021 to December 1, 2021, 11.12% from<br>December 2, 2021 to January 9, 2022, 11.14% from January 10, 2022 to August 8, 2022, and 8.25% from August 9, 2022 to December 31, 2022.
---	---
2.	Represents adjustment to West Fraser Estimated ADD rate of 4.52% for 2022 and 6.80% for 2021.
---	---
3.	The total represents the combined CVD cash deposit rate and West Fraser Estimated ADD rate of 14.37% for January 1,<br>2021 to December 1, 2021, 11.86% for December 2, 2021 to December 31, 2021, 9.58% for January 1, 2022 to January 9, 2022, 9.60% from January 10, 2022 to August 8, 2022, and 8.14% from August 9, 2022 to<br>December 31, 2022.
---	---
4.	$55 million represents the duty recovery attributable to the finalization of AR2 duty rates for the 2019 POI.<br>
---	---
5.	$81 million represents the duty recovery attributable to the finalization of AR3 duty rates for the 2020 POI.<br>
---	---

As of December 31, 2022, export duties paid and payable on deposit with the USDOC were $784 million (December 31, 2021 - $662 million).

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Impact on balance sheet

Each POI is subject to independent administrative review by the USDOC, and the results of each POI may not be offset.

Export duty deposits receivable is represented by:

Export duty deposits receivable	2022		2021
Beginning of year	$	242	$	178
Export duties recognized as duty deposits receivable		97		55
Interest recognized on duty deposits receivable		15		9
End of year	$	354	$	242
Export duties payable is represented by:
---	---	---	---	---	---	---
Export duties payable	2022			2021
Beginning of year	$	(69	)	$	—
Export duties payable related to AR4		2			(69	)
Interest recognized on the export duties payable		(6	)		—
End of year	$	(73	)	$	(69	)

Appeals

27.	Contingencies

We are subject to various investigations, claims and legal, regulatory and tax proceedings covering matters that arise in the ordinary course of business activities, including civil claims and lawsuits, regulatory examinations, investigations, audits and requests for information by governmental regulatory agencies and law enforcement authorities in various jurisdictions. Each of these matters is subject to uncertainties and it is possible that some of these matters may be resolved unfavourably. Certain conditions may exist as of the date the financial statements are issued, which may result in an additional loss. In the opinion of management none of these matters are expected to have a material effect on our results of operations or financial condition.

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Directors & Officers

Effective February 14, 2023

DIRECTORS

	Principal Occupation
Henry H. Ketcham	Chair of the Board
Reid E. Carter	Corporate Director
Raymond W. Ferris	President and Chief Executive Officer
John N. Floren	Corporate Director
Brian G. Kenning	Corporate Director
Ellis Ketcham Johnson	President, Private Philanthropic Foundation
Marian Lawson	Corporate Director
Colleen M. McMorrow	Corporate Director
Robert L. Phillips	Corporate Director
Janice G. Rennie	Corporate Director
Gillian D. Winckler	Corporate Director
SENIOR EXECUTIVE OFFICERS
	Office Held
Raymond W. Ferris	President and Chief Executive Officer
Christopher A. Virostek	Senior Vice-President, Finance and Chief Financial Officer
Sean P. McLaren	Chief Operating Officer
Kevin J. Burke	Senior Vice-President, Wood Products
Keith D. Carter	Senior Vice-President, Western Canada
Robin A. Lampard	Senior Vice-President, Finance
Christopher D. McIver	Senior Vice-President, Marketing and Corporate Development
Alan G. McMeekin	Senior Vice-President, Europe
James W. Gorman	Senior Vice-President, Corporate and Government Relations

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Glossary of Key Terms

2023 Notes

Norbord’s 6.25% senior notes due April 2023

2027 Notes

Norbord’s 5.75% senior notes due July 2027

AAC

Annual allowable cut. The volume of timber that may be harvested annually from a specific timber tenure.

ADD

Antidumping duties

Angelina

Angelina Forest Products LLC

Angelina Acquisition

Acquisition of Angelina Forest Products LLC on December 1, 2021

Administrative Review by the USDOC

B.C.

British Columbia

BCTMP

Bleached chemithermomechanical pulp

CAD or CAD$

Canadian dollars

Crown timber

Timber harvested from lands owned by a provincial government

CVD

Countervailing duties

Dimension Lumber

Standard commodity lumber ranging in sizes from 1 x 3’s to 4 x 12’s, in various lengths

EBITDA

Earnings before interest, taxes, depreciation and amortization

EDGAR

Electronic Data Gathering, Analysis and Retrieval System

EPS

Earnings Per Share

ESG

Environmental, social and governance

Europe

EU EWP

Europe engineered wood products

EWP

Engineered wood products

GHG

Greenhouse gas

HWP

Harvested wood product

LVL

Laminated veneer lumber. Large sheets of veneer bonded together with resin then cut to lumber equivalent sizes.

m^3^

A solid cubic metre. A unit of measure for timber, equal to approximately 35 cubic feet.

Mcf

One thousand cubic feet. A unit of measure for laminated veneer lumber.

MD&A

Management’s Discussion & Analysis

MDF

Medium-density fibreboard. A panelboard produced by chemically bonding highly refined wood fibres of uniform size under heat and pressure.

Mfbm

One thousand board feet (equivalent to one thousand square feet of lumber, one inch thick)

MMfbm

One million board feet (equivalent to one million square feet of lumber, one inch thick)

MMBTU

Million British Thermal Units

Msf

One thousand square feet. A unit of measure for Panel products (such as OSB, MDF and plywood) equal to one thousand square feet on a 3/4-inch basis for MDF, on a 3/8-inch basis for plywood and on either a 3/8-inch or 7/16-inch thick basis for OSB.

MMsf

One million square feet

Mtonne

One thousand tonnes

North America

NA EWP

North America engineered wood products

NBSK

Northern bleached softwood kraft pulp

NCIB

Normal course issuer bid

Norbord

Norbord Inc.

Norbord Acquisition

Acquisition of Norbord completed February 1, 2021

NYSE

New York Stock Exchange

OSB

Oriented strand board. An engineered structural wood panel produced by chemically bonding wood strands in a uniform direction under heat and pressure.

Panelboard

Oriented strand board, particleboard, medium-density fibreboard and plywood

Particleboard

A panelboard produced by chemically bonding clean sawdust, small wood particles and recycled wood fibre under heat and pressure

Plywood

A panelboard produced by chemically bonding thin layers of solid wood veneers

ROCE

Return on capital employed

SEDAR

System for Electronic Document Analysis and Retrieval

SIB

Substantial issuer bid

SPF

Spruce/pine/balsam fir lumber

SPF Dimension

Lumber produced from spruce/ pine/balsam fir species

SYP

Southern yellow pine lumber

SYP Dimension

Lumber produced from southern yellow pine species

Ton

A unit of weight equal to 2,000 pounds, generally known as a U.S. ton

Tonne

A unit of weight in the metric system equal to one thousand kilograms or approximately 2,204 pounds

TSX

Toronto Stock Exchange

U.K.

United Kingdom

UKP

Unbleached kraft pulp

U.S.

United States

USD or $ or US$

United States dollars

USDOC

United States Department of Commerce

USITC

United States International Trade Commission

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Corporate Information

Effective February 14, 2023

ANNUAL GENERAL AND SPECIAL MEETING<br><br><br>The Annual General and Special Meeting of the shareholders of the Company will be held on April 18, 2023 at 11:30 a.m. at Quesnel, British Columbia, Canada.<br><br><br><br> <br>AUDITORS<br><br><br>PricewaterhouseCoopers LLP<br> <br>Vancouver, British Columbia<br><br><br>Canada<br> <br><br> <br>LEGAL COUNSEL<br> <br>McMillan LLP<br> <br>Vancouver, British<br>Columbia<br> <br>Canada<br> <br><br><br><br>TRANSFER AGENT<br> <br>Computershare Investor<br><br><br>Services Inc.<br> <br>Tel: 1 (800) 564-6253<br><br><br>Canada/USA<br> <br>(514) 982-7555<br><br><br>International<br> <br><br> <br>FILINGS<br> <br>www.sedar.com<br><br><br>www.sec.gov/edgar.shtml<br> <br><br><br><br>Shares are listed on the<br> <br>Toronto Stock Exchange &<br><br><br>New York Stock Exchange<br> <br>under the symbol: WFG<br><br><br><br> <br>INVESTOR CONTACT<br><br><br>Robert B. Winslow, CFA<br> <br>Director, Investor<br><br><br>Relations & Corporate<br> <br>Development<br><br><br>Tel: (416) 777-4426<br><br><br>E: [email protected]<br> <br><br><br><br>WEBSITE<br> <br>WestFraser.com	CORPORATE OFFICES<br> <br>Corporate<br>Headquarters<br> <br>885 West Georgia Street,<br> <br>Suite 1500<br><br><br>Vancouver, British Columbia<br> <br>Canada V6C 3E8<br><br><br>Tel: (604) 895-2700<br> <br><br><br><br>US Operations Office<br> <br>1900 Exeter Road, Suite 105<br><br><br>Germantown, Tennessee<br> <br>USA 38138<br><br><br>Tel: (901) 620-4200<br> <br>Fax: (901) 620-4204<br> <br><br> <br>Canadian Operations Office<br><br><br>1250 Brownmiller Road<br> <br>Quesnel, British Columbia<br><br><br>Canada V2J 6P5<br> <br>Tel: (250) 992-9244<br><br><br>Fax: (250) 992-9233<br> <br><br><br><br>Cowie Regional Office<br> <br>Station Road<br><br><br>Cowie, Stirlingshire<br> <br>Scotland FK7 7BQ<br><br><br>Tel: +44 (0) 1786 812921<br> <br>Fax: +44 (0) 1786 817143<br><br><br><br> <br>Toronto Corporate Office<br><br><br>One Toronto Street, Suite 600<br> <br>Toronto, Ontario<br><br><br>Canada M5C 2W4<br> <br>Tel: (416) 365-0705<br><br><br><br> <br>West Fraser<br><br><br>Technology Centre<br> <br>4960 Levy Street<br><br><br>Ville St. Laurent, Quebec<br> <br>Canada H4R 2P1<br><br><br>Tel: (514) 832-3360<br> <br>Fax: (514) 832-3388	SALES OFFICES<br> <br>SPF Lumber, MDF,<br>LVL<br> <br>1250 Brownmiller Road<br> <br>Quesnel, British Columbia<br><br><br>Canada V2J 6P5<br> <br>Tel: (250) 992-9254<br><br><br>Fax: (250) 992-3034<br> <br><br><br><br>SPF Export Lumber & Pulp<br> <br>885 West Georgia Street,<br><br><br>Suite 1500<br> <br>Vancouver, British Columbia<br><br><br>Canada V6C 3E8<br> <br>Tel: (604) 895-2700<br><br><br>Fax: (604) 895-2976<br> <br><br><br><br>SYP Lumber<br> <br>1900 Exeter Road, Suite 105<br><br><br>Germantown, Tennessee<br> <br>USA 38138<br><br><br>Tel: (901) 620-4200<br> <br>Fax: (901) 620-4204<br> <br><br> <br>OSB & Plywood<br><br><br>One Toronto Street, Suite 600<br> <br>Toronto, Ontario<br><br><br>Canada M5C 2W4<br> <br>Tel: (416) 365-0705<br><br><br><br> <br>Newsprint<br> <br>2900-650 W Georgia Street<br> <br>Vancouver, British Columbia<br><br><br>Canada V6B 4N8<br> <br>Tel: (604) 681-8817	OPERATIONS<br> <br>Canadian<br>Operations<br> <br>SPF Lumber, Pulp,<br> <br>Plywood, MDF & LVL<br><br><br>1250 Brownmiller Road<br> <br>Quesnel, British Columbia<br><br><br>Canada V2J 6P5<br> <br>Tel: (250) 992-9244<br><br><br>Fax: (250) 992-9233<br> <br><br><br><br>OSB<br> <br>One Toronto Street, Suite 600<br><br><br>Toronto, Ontario<br> <br>Canada M5C 2W4<br><br><br>Tel: (416) 365-0705<br> <br>Fax: (416) 365-3292<br> <br><br> <br>US Operations<br><br><br>SYP Lumber & OSB<br> <br>1900 Exeter Road, Suite 105<br><br><br>Germantown, Tennessee<br> <br>USA 38138<br><br><br>Tel: (901) 620-4200<br> <br>Fax: (901) 620-4204<br> <br><br> <br>European Operations<br><br><br>Station Road<br> <br>Cowie, Stirlingshire<br><br><br>Scotland FK7 7BQ<br> <br>Tel: +44 (0) 1786 812921

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112 WEST FRASER

Memberships

West Fraser actively participates in numerous forestry sector associations, local associations and external initiatives. We also belong to many local business organizations, such as the chambers of commerce, across our operating communities. Corporate association memberships include:

American Wood Council represents America’s wood products manufacturing industry	Forest Resources Association represents the U.S. wood products value chain by providing safety, technical and operating resources as well as wood supply chain expertise and guidance	Southern Forest Products Association focuses on the Southern Pine lumber industry and promoting SYP products in domestic and international markets
Canadian Wood Council represents Canada’s wood products manufacturing industry	FPInnovations, a non-profit member organization that carries out scientific research and technology transfer for the Canadian forest industry	Structural Building Components Association, a trade association representing manufacturers of structural building components
The Embedding Project, a global research project helping companies embed sustainability across their operations and decision-making	fRI Research, a non-profit research organization providing innovative science to support decisions and policy development for land and resource<br>management	Sustainable Forestry Initiative, an independent, non-profit organization dedicated to promoting sustainable forest management
Federal Forest Resource Coalition, a national non-profit trade association dedicated to improving the management of federal forests	National Council for Air and Stream Improvement, a non-profit research institute that focuses on environmental topics of interest to the forest products<br>industry	Treated Wood Council, a trade association for companies producing pressure-treated wood products
Forest Products Association of Canada, Canada’s national forest sector association	Softwood Lumber Board promotes the benefits and uses of softwood lumber products in outdoor, residential and non-residential construction

Regional Forestry Association Memberships include:

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Circular Economy

The linear economy model of production, consumption and disposal is not sustainable. West Fraser supports the circular economy, which is designed to eliminate waste and pollution through upstream interventions; to keep products and materials in use at the highest value possible throughout their lifetimes; and to regenerate natural systems. The trees we harvest and the products we make are balanced by protecting and regenerating the ecosystems where we work. This approach benefits the environment, society and the larger economy while addressing critical issues such as climate change, biodiversity, waste and pollution.

Natural, renewable and sustainable, wood is the

ultimate circular economy building material

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Non-GAAP Financial Information: This Annual Report uses various Non-GAAP and other specified financial measures, including “Adjusted EBITDA”, “net debt to capital”, and expected capital expenditures. Additional information relating to the use of these Non-GAAP and other specified financial measures, including required reconciliations, is set out in the section of our 2022 Annual MD&A entitled “Non-GAAP and Other Specified Financial Measures”.

Forward-Looking Statements: This Annual Report includes statements and information that constitutes “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Please refer to the cautionary note entitled “Forward-Looking Statements” in our 2022 Annual MD&A for a discussion of these forward-looking statements and the risks that impact these forward-looking statements.

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Concept and design: worksdesign.com

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